Howard Stern jumps to satellite
Ending months of speculation, shock jock announces he’s joining Sirius satellite radio in 2006. NEW YORK (CNN/Money) – Howard Stern announced Wednesday that he is taking his morning radio show to satellite radio. Stern will join Sirius Satellite Radio starting January 2006 in what is being billed as a five-year, multimillion dollar contract. Calling satellite radio “the next big thing,” Stern said on his morning radio show that commercial radio is no longer a safe haven for shock jocks like him.”The SuperBowl did us in,” said Stern, a reference to this year’s half-time show when Janet Jackson exposed her breast during a live performance. Viacom-owned CBS, which broadcast the game, was fined $550,000 last week for the incident. The episode touched off a public outcry about indecency on the airwaves. That sentiment eventually led Clear Channel Communications, the country’s No. 1 radio operator, to pull the “Howard Stern Show” off the six stations that carried it. It also led to renewed calls for federal legislation that would boost fines for programming deemed indecent and offensive from $27,500 to as much as $500,000 per violation. Far from waning over time, the intensity behind the furor has only increased. Congress is still considering whether to raise fines. “It’s time to go,” Stern said on his program Wednesday morning, noting that he hasn’t been happy for a long time. “I believe more in satellite than I do in radio.” Stern suggested that his announcement would come as a surprise to officials at Infinity Broadcasting, which broadcasts his morning show in 46 markets around the country and is a unit of Viacom. Infinity Broadcasting did not immediately respond to the news. Stern’s employment contract runs through the end of 2005. He said he expects to continue broadcasting on Infinity stations until then. Stern is not the only shock jock eyeing satellite radio, a subscription-based, commercial-free medium that, like cable television, is largely unregulated. On Monday, the “Opie & Anthony” show debuted on Sirius’ larger rival, XM Satellite Radio. The move by Gregg “Opie” Hughes and Anthony Cumia comes two years after they were dumped by Infinity Broadcasting over a stunt in which they broadcast descriptions of listeners having sex in public places, including St. Patrick’s Cathedral in New York. Radio industry analysts said that other lower-profile shock jocks are also in discussions with satellite radio operators. But analysts warned that satellite radio operators have reason to tread carefully. Conservative groups have called on Congress to regulate cable and satellite operators. If Congress boosts indecency fines, satellite and cable regulation could rise to the forefront, analysts said. Sirius officials, however, were clearly jubilant. “This is a watershed event for the industry,” said Sirius CEO Joseph Clayton during an analyst call. He said it established satellite radio as the successor to FM radio, the same way that FM replaced AM radio years ago. “Sirius Satellite Radio is where the excitement, creativity and energy that FM once had is gravitating to, today and tomorrow,” said Clayton. Stern has made a bundle, not just for himself but for Infinity Broadcasting. Analysts estimate that Stern & Co. brings in roughly $25 million a year in profits for Infinity. So is satellite radio a buy? Clayton said Wednesday that Stern’s show costs $100 million a year to run, including salaries. To break even, he said Sirius would need to add one million new subscribers, a feat that he said should be easy to achieve. “Howard Stern is the most valuable personality in radio today.”
Sirius (SIRI: up $0.52 to $3.87, Research, Estimates) stock jumped in morning trading.
Howard Stern jumps to satellite