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Bee-otched For: criticizing Howard's new contract with Sirius
Age: various
Occupation: various
Last Seen: everywhere
Bee-otched For: criticizing Howard's new contract with Sirius
Ladies and gents, I present to you five more years of the King of All Media.
Last Thursday, Howard Stern announced that he'll be staying with Sirius/XM for another five years. His new contract with the satcaster is believed to be around $400 million, $100 million less than his current contract, which expires at the end of the year.
I would imagine that many in the radio biz are laughing at the new deal, especially those in terrestrial radio, plus his naysayers. $100 million less translates to them as Stern's been a failure on satellite. Yeah, like a man who brought 20 million listeners to a company that should have been dead by now failed them. Truth is, Howard has broke even for the company. So, why only $400 million this time around? The answer is quite simple.
Several years ago, Howard's agent, Don Buchwald advised him to sell most - if not all - of his Sirius stock. On the original contract, Stern and Buchwald were given millions of dollars worth of shares in the company. However, Sirius was still young at the time and still a fledgling company, True, he brought an audience to the company, Howard and Don obviously knew that their stock would lose lots of value.
And they were right.
When Sirius and XM merged, the company's stock went from $20 per share - give or take - to less than a dime. Thanks to multiple factors, such as the merger taking months to complete to a slowdown in subscriptions thanks to the recession, many laughed at Stern and Sirius.
But, it was Stern who had the last laugh.
Thanks to media giant Liberty Media investing millions into the company and new cars starting to fly off the lots again, Sirius XM's stock's rising again. Yesterday, it closed at $1.38. It's still low, and it's probably one reason why Stern's contract was $100 million less; there was no true stock option this time around. Let's not forget too that here in Grand Rapids, the two companies that run 2/3 of all the radio stations in town filed for bankruptcy.
Bear in mind, too that Howard's 56 years old, and at contract's end, he'll be 61. Honestly, I think he'll start working less starting in the beginning of his new contract. It's not clear on how many days per week he'll be working, or even how long his show will be per day. Who knows? Maybe his show will only be on 6-9 a.m. daily. It's all in the eye of the beholder.
Laugh all you want, Howard will retire on top.
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