Stern Words From CBS

The big broadcaster sues the shock jock.
Author:
Publish date:

CBS

(CBS) - Get Report

sued

Sirius

(SIRI) - Get Report

and shock jock Howard Stern.

Citing what it called "multiple breaches of contract, misappropriation and unjust enrichment," CBS Radio said it sued Stern, his agent and his company. CBS wants $500 million in damages -- matching the amount Stern signed for at the end of 2004, when he agreed to walk away from CBS' Infinity radio unit and join Sirius.

"Howard Stern repeatedly and willfully breached his written contract with CBS Radio over the last 22 months of that contract, misappropriated millions of dollars worth of CBS Radio airtime for his own financial benefit, and fraudulently concealed his interest in hundreds of millions of dollars of Sirius stock while promoting it on the air," CBS says its 43-page suit claims.

Sirius reps weren't immediately available for comment.

The lawsuit episode began to play out Tuesday morning, when the

New York Post

reported in its Page Six gossip column that CBS was about to sue Stern. Stern, who has made no secret of his distaste for CBS chief Les Moonves, lashed out at CBS and Moonves in a Tuesday afternoon press conference,

Reuters

reported.

"I'm offended. I really do think this is a personal vendetta," Stern told the news conference, according to

Reuters

. "Les has had it in for me for a long time. I don't deserve it."

Stern agreed to join Sirius in October 2004, when he still had more than a year to run on his contract with Infinity. He stayed on with the free broadcaster but spent much time mocking the company and talking up his Sirius gig. In the runup to his joining Sirius last month, Stern has bolstered the cash-burning company's subscriber growth, partly at the expense of rival

XM

(XMSR)

. In the fourth quarter ended in December, Sirius outpaced older XM on the subscriber-acquisition front for the first time ever.

That performance apparently drew CBS' ire. CBS claims that Stern's rich stock bonus tied to the subscriber gains amounted to fraud: "The complaint alleges that the Sirius-Stern contract provided that Stern was to receive this stock payment in 2010, but it had an acceleration provision that allowed Stern to receive the compensation as early as January 2006 if these subscriber targets were met. All of Stern's actions for which he received this expedited compensation occurred during the time that Stern was under exclusive contract with CBS Radio, when the Sirius payment terms to Stern were kept secret."

When CBS and

Viacom

(VIA) - Get Report

split at the beginning of the year, many investors expected that Viacom would rocket into the new-age stratosphere while stodgy old CBS, with its radio business and outdoor billboards, would stagnate and pay investors chunky dividends.

In some ways the opposite has happened, thanks largely to the hard-charging Moonves, who refuses to allow his traditional media company to go the way of old media dinosaurs. Instead, Moonves had been quick to broker a bunch of deals that put his content on wireless devices and make them available for download online. He has wrapped up a deal to buy college sports network CSTV and notably fathered a new network, the CW, that will blend highly rated programs from his fledgling UPN enterprise with that of

Time Warner's

(TWX)

WB. Moonves, as he himself notes frequently, intends to get paid for his content.

Late Tuesday, Sirius slipped 9 cents to $5.02.