Could Howard Stern leave Sirius?
The radio host is likely to enter contract talks with Sirius XM in the coming year. Can Sirius afford to keep him?
Stern's five-year, $500 million radio contract with Sirius is winding down, and he will likely begin negotiating this next year for a renewal.
The problem for Stern is that few other places will offer that kind of money. And who knows if Sirius will even come close to matching its previous offer?
Sirius has struggled since merging with former rival XM Radio, and came awfully close to filing for bankruptcy this year. The company counts on new car sales for much of its business, since it can hook new customers through free trial memberships.
But the downturn in the car business has taken a huge bite out of those opportunities. And the rise of Internet radio continues to nip at Sirius as well.
All of that means that Sirius is hardly in a financial position to offer Stern the money he likely wants. And analysts tell the AP that Stern would be unlikely to give up his bullhorn.
The question now is how much does Sirius need Howard? The company has stabilized at about 18 million to 19 million subscribers. Sirius has never been profitable, the AP reports, and its revenue is pretty much flat.
About $80 million of Sirius' programming money has gone to Stern and his staff each year, the AP reports.
"He's not going to get $500 million again," said one analyst, David Joyce at Miller Tabak.
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Investors are anxious to see if hiring can maintain its strong pace in the second half of the year.
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