Should Sirius XM Re-Sign Howard Stern?

NEW YORK (TheStreet) -- To renew or not to renew Howard Stern's current, very expensive $500 million contract could be a difficult choice for cost-conscious Sirius XM(SIRI) when their agreement expires at the end of 2010.

On one hand, Stern continues to be a valuable asset as an on-air personality, with his ostensibly shocking antics. Knowing this, Stern, of course, will be unlikely to accept any salary below his current five year, $500 million deal with Sirius XM.

Plus, Stern may have a new bargaining chip for upping, or at least retaining, his currently salary levels at Sirius XM. When Sirius Satellite and XM Satellite were two separate entities, their tug-of-war for "shock jock" Stern drove up his value to $500 million. His contract began in 2006. Although he no longer has this particular bargaining chip following the entities' merger, his new bargaining chip involves a possible offer from Clear Channel Communications.

Clearly, Clear Channel has the financial muscle to bring on high-salaried talent, having signed mega personalities like radio host Rush Limbaugh and American Idol host Ryan Seacrest.

"We clearly have both the willingness and the financial wherewithal to consider high-profile talent," John Hogan, Clear Channel's chief executive, told Bloomberg in an e-mailed statement. "We would be the most logical company for him to optimize his exposure and financial return."

On the other hand, why should Sirius XM keep Stern at his current jaw-dropping salary levels when that same amount of money could be invested in bringing on a host of other popular, audience-generating personalities.