Posted on 01/12/2006 12:59:23 AM PST by GLOBAL_PEACE
Just three days after starting his new job at Sirius Satellite Radio Inc., shock jock Howard Stern is now able to sell the roughly $200 million in Sirius stock that he received as part of his five-year deal with the company.
Sirius' contract with Stern runs through 2010, but the company disclosed last week that it was giving Stern and his agent 34.4 million shares of stock right away because it had already reached certain undisclosed targets for subscriber growth under the deal it signed with Stern in late 2004.
On Wednesday, the company made another regulatory filing saying that entities controlled by Stern and his agent, Don Buchwald, would receive the proceeds of the sale of the shares, which could occur at any time. It's not yet clear when or how much they will sell, and Buchwald did not return a call seeking comment.
Nearly all of the stock is going to Stern, but Buchwald also received a substantial chunk: 3.125 million shares, worth nearly $20 million at current share prices, or 10 percent of the 31.25 million shares that Stern received, which are now worth just under $200 million.
Sirius originally said its deal with the shock jock was worth about $100 million per year in cash and stock over the five years of the contract, or $500 million, including costs for producing and marketing the show
But thanks to the nearly doubling of Sirius' shares since then, the value of the stock portion of the contract went from about $110 million to more than $200 million, making the total deal now worth more than $600 million at current stock prices.
Stern could also stand to get even more stock grants as well as a portion of the revenues from advertising on Stern's show if other, "substantial" targets for subscriber gains are met, according to Sirius spokesman Jim Collins. Collins declined to say how large those grants might be or what targets needed to be met in order to trigger the additional payments.
Stern began his broadcasts from Sirius' Manhattan studios on Monday after a long career at Infinity Broadcasting, which is now known as CBS Radio and is a part of CBS Corp.
Unlike traditional radio broadcasts, satellite radio is free from federal decency rules, something Stern long railed against on his show. Stern, a hugely popular radio personality, has promised his fans on Sirius a stripper pole, live sex and other programming that would be likely to raise the ire of federal regulators.
Sirius is engaged in a high-stakes battle with its rival XM Satellite Radio Holdings Inc. to build up programming and subscribers in hopes of becoming profitable one day. Sirius said in its regulatory filing Wednesday that as of last Sept. 30 it had racked up an accumulated loss of $2.4 billion so far.
While neither company is profitable, both have also been quickly adding subscribers, who pay about $13 a month for either service. Sirius ended 2005 with some 3.3 million subscribers, compared with 1.1 million a year earlier and well ahead of its earlier forecasts. XM says it now has more than 6 million subscribers.
Sirius shares fell 28 cents or 4.3 percent to $6.22 in active trading on the Nasdaq Stock Market Wednesday, while XM shares rose 29 cents, or almost 1 percent, to $29.87 also on the Nasdaq.
Can anyone here say "Martha Stewart?"
" promised his fans on Sirius a stripper pole, live sex and other programming that would be likely to raise the ire of federal regulators."
I don't care for Stern, but you've got to hand it to him for the deal he cooked up. What exactly does a stripper pole sound like on the radio, and how sad are the people who signed up to listen?
You can listen for free if you use any of the P2P networks. I listened on the first day to see what the hype was all about. It was cr@p.
How bullish is he on the company that he sold that much immediately?
They will reinvent television?
Lots of pantingly suggestive talk (like the radio show) but nothing tangible here. Far as we know he ain't sold nuthin'.
So, a secret deal that allows someone to obtain shares of a publicly traded company based on meeting secret targets? Interesting. Did he sell those shares based on inside information about ratings or targets?
I pity any adult who chooses to listen to the show more than once. Such people really have a shallow life if Stern's 7th grade antics cause them to tune in - and an even more shallow life if they pay Sirius for the privilege!
Am I being judgmental? You bet! When I encounter trash, I jusdge it as such and avoid it. And I pity those who choose to wallow in it.
He wants to get paid before the whole thing takes a dive. They already missed sales expectations and im sure people will get fed up listening to his crap over and over. Who wants to hear the F word 68 times a morning anyways? I could go down to the local schoolyard and save myself the $12 bucks a month.
Both Howard Stern and his buddy Don Buchwald look fishy.
You better believe he's bailing. Pay-radio is going to hit its peak pretty quickly. I don't see it as a particularly strong "growth" industry. Once the truckers are done subscribing, it'll be steady as she goes in flyover country.
Personally, it wouldn't occur to me in a bajillion years to pay for my radio, but I live close enough to cities that there's a pretty huge selection of free stations available. I imagine pay radio will get most of it's non-trucker business from really rural areas that are out of "air-shot" (badda-bing) of any city.
Did you see the write-up Family Media Guide wrote?
77 times. Not a bad guess.
How can Howard Stern and Don Buchwald profit on a secret deal like that? I don't get it.
ritewingwarrior wrote:
"I could go down to the local schoolyard and save myself the $12 bucks a month."
---I wouldn't do it, you can get arrested if you get mistaken for a perv hanging out on skool playgrounds nowadays. You'r beter off listening to the F word around your buddies. I always give my friends a good dose of the F word so they get enough around me until next time.
I even get compliments it rolls of my tongue so easily. :) I have mastered the fowl language to the extent that it's unconciously rolls out like the red carpet at a strippers convention.
You're missing the point. It's a signing bonus disquised as an option agrrement.
Sirius insiders will buy the stock immediately.
Meaning Howard gets a $200 Mil bonus regardless how well his show fares in the market.
This was all arranged before the ink was dry.
I have Dish Network and they make all people subsidize something I will never listen.
So in fact I am helping to pay for this, it is about 8 % of my bill.
Too bad I like dish but it pi$$ me off.
Howie's getting his financial advice from Bill Shatner.
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