Stern gets SIRIUS

 Uncategorized
Feb 152006
 
Authors: Drew Haugen

After the announcement of his switch from FM radio to SIRIUS satellite radio on Oct. 6, 2004, the floodgates of wealth and unrestricted speech have been opened for renowned radio jockey and "King of All Media," Howard Stern.

In the months following the acquisition of Howard Stern's show, SIRIUS stock, traded as SIRI on NASDAQ, nearly doubled.

This was good news for Stern. As part of his five-year contract, he is set to make $500 million which extends until 2010, including 34.4 million shares of SIRIUS stock awarded to him and his agent, Don Buchwald.

The majority of the SIRIUS shares (31.25 million or about $190 million worth) went to Stern. His agent retained a healthy portion of SIRIUS stock (3.125 million shares) worth about $19 million at current prices.

On Wednesday, SIRIUS stock closed at $6.75 a share on the NASDAQ stock market.

After Stern's announcement to move from his Phoenix radio station, KZON-FM 101.5, owned by CBS Radio, to the digital waves of SIRIUS, fans and SIRIUS employees rejoiced at the monumental deal.

"I think it's probably one of the most brilliant business moves radio has ever seen," said Jason Hill, sophomore business administration major. "He has so many die-hard fans that will follow him anywhere, and with his publicity and this subscription-based radio he has effectively advertised more for SIRIUS than SIRIUS has."

SIRIUS leadership felt similarly about the company's new golden boy.

"The launch of Howard's show on SIRIUS has raised the public awareness of SIRIUS and, in general, that of satellite radio," said Patrick Reilly, spokesperson for SIRUS Satellite Radio. "The arrival of Howard has also helped us draw many new subscribers. Howard's show is also drawing advertisers that heretofore had never used SIRIUS.

"When we announced Howard's plan to come to SIRIUS back in fall 2004, we had about 700,000 subscribers. At the end of 2005, a week before he began his first show with SIRIUS, our number of paid subscribers had reached 3.3 million." Reilly added.

Stern, who is renowned for his "shock-jock" on-air style, filling shows with strippers, perverse topics and lewd language, will now have free reign without the oversight of his longtime enemy, the Federal Communications Commission (FCC).

"We are a pay service and thus not regulated by the FCC on issues of content," Reilly said.

Because SIRIUS satellite radio is a subscriber-driven radio network, its shows can be broadcast unedited and commercial-free. Thus, Stern will no longer be subject to the FCC indecency restrictions that have plagued his DJ style for his entire career.

 

"The guy, since he started, has felt censorship shouldn't apply, and this is a move he's earned." Hill said.

According SIRIUS' Web site, Howard Stern is the No. 1 national radio host among males 18 to 49 years of age and ranks No. 1 in many of the 46 major markets where his show is broadcast, including New York and Los Angeles.

"It has been my dream to have the top-rated show in radio since I was five years old," Stern said at a November press conference. "SIRIUS – the future of radio – will take this dream to a whole new level as I bring my fans my show my way. It will be the best radio they will ever hear."

Drew Haugen can be reached at regional@collegian.com

 

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