Howard Stern announces that he will stay on with Sirius XM for 5 more years. Here is a look at Stern's career path and the contract negotiations, lawsuits and hefty FCC fines that he's accumulated along the way.
(Howard Stern's Road to Sirius XM updated with information on his new 5-year contract.)
NEW YORK (TheStreet) -- Howard Stern has announced that he will be staying on with Sirius XM (SIRI) for 5 more years.
Less than a month before his original 5-year, $500 million contract with Sirius was set to expire, the self-professed "King of All Media" announced during his morning talk show that he signed a new, 5-year contract with the satellite radio company. As his contract neared its expiration date, negotiations between the satellite radio giant and the shock jock began to heat up. Reports speculated that Stern had plans of his own, claiming that Stern hinted at his own online venture or a possible mobile application. In September Stern told listeners that he was "pretty sure" he was going to leave the satellite radio industry, a few days after Sirius XM chief executive officer Mel Karmazin said he was "very confident" that Stern wasn't going to leave Sirius when the contract expired. Attracting attention to himself and the company by making a public display of his contract negotiations isn't a new tactic for Stern. It's a strategy that has been mastered by super star athletes and their agents. While the will-he, won't-he talk set the stage for negotiations, shareholders were left to sit on the sidelines and await an outcome that was sure to sway Sirius stock one way or the other. >>Sirius XM: Hirings, Firings and Negotiations Sirius executives have been in talks with several expiring programs to negotiate new contract terms. "We may not be able to secure new programming arrangements with one or more of these providers, or enter into new agreements at costs that are acceptable to us," the company said in its most recent quarterly report. Here is a look at Stern's career path and the contract negotiations, lawsuits and hefty FCC fines that he's accumulated along the way.
Howard Stern signed on as a DJ for now defunct WNBC-AM in New York in 1982. NBC management almost canceled Stern's contract for fears that the "shock jock" might be too inappropriate. During his years working at NBC he was closely monitored and encouraged to stay away from risqué topics such as sex and religion. By 1985, Stern had the highest ratings at the station, but he didn't exactly follow the its strict format. Stern and his crew were eventually fired on September 30, 1985 after airing a comedy sketch called "Bestiality Dial-A-Date."
After leaving NBC, Stern moved into the morning drive time slot on WXRK-FM, also known as K-ROCK. In 1986, Infinity Broadcasting, now CBS ( CBS) Radio, started airing Stern's show nationwide. It soon claimed the top spot in Philadelphia, Los Angeles and several other major markets. In 1992, Stern received his first of many fines from the Federal Communications Commission. Infinity Broadcasting had to pay $600,000 after Stern talked about masturbating to a picture of Aunt Jemima on air. By 2005, Stern had racked up around $2.5 million in fines from the FCC for his employers.
Stern's autobiography, Private Parts, hit store shelves in October 1993. The book was Simon & Schuster's fastest-selling book in its 70-year history. After only a week the book reached the No. 1 spot on The New York Times ( NYT) best seller list. The title stayed on the best seller's list for 20 weeks. In 2004, Stern was suspended from six markets after he featured Rick Salomon on his show and to discuss Paris Hilton's sex tape, which led to $495,000 in fines for then radio giant Clear Channel Communications. Clear Channel was fined by the FCC for each of Stern's 18 violations and the radio chain dropped his show from its stations. "Mr. Stern's show has created a great liability for us and other broadcasters who air it," Clear Channel Radio CEO John Hogan said in a news release after the dispute. "The Congress and the FCC are even beginning to look at revoking station licenses. That's a risk we're just not willing to take."
Stern stayed at K-ROCK for a little while longer until he struck a deal with Sirius XM. A publicized legal dispute erupted between Stern and CBS Radio after he signed a 5-year, $500 million deal with the satellite radio company. CBS Radio ended up suing Stern for using his airtime on its stations to promote his move to Sirius. He "misappropriated millions of dollars' worth of CBS Radio air time for his own financial benefit," the lawsuit said. Sirius agreed to pay $2 million to CBS Radio to settle the case and for the rights to Stern's classic recordings. But the quarrel didn't end there.
When Stern left CBS Radio, he did not leave on good terms. After the CBS CEO Leslie Moonves slapped him with a lawsuit for violating his contract terms, Stern appeared on Late Show with David Letterman wearing a shirt with the CEO's face on it that said "I Hate Les Moonves." "I believe you are working for one of the biggest jerks on the planet," Stern told Letterman. "Les Moonves is a bully."
On Dec. 9, Howard Stern announced that he signed a new 5-year deal with Sirius XM, ending months of speculation about the shock jock's plans. Sirius stock is up almost 120% over the past year and has recently been trading around $1.40. Shares surged more than 9% on Thursday morning following the news of Stern's contract, which came less than a month before his original 5-year, $500 million contract was set to expire. Many investors were worried that Sirius CEO Karmazin wouldn't be able to afford giving Stern a raise to keep him with the company and were especially concerned about how many subscribers Sirius would lose if it lost Stern. In early September, Karmazin spoke at the Bank of America and Merrill Lynch Media, Communications & Entertainment Conference, where he told the audience he was "very confident" that Stern wouldn't leave Sirius. He added that even if Stern left the satellite radio company, he's wasn't too worried about losing listeners. "They may have come for Howard, they may love Howard... but they listen to other channels," he said, the Los Angeles Times reported. -- Written by Theresa McCabe in Boston. >To contact the writer of this article, click here: Theresa McCabe. >To follow the writer on Twitter, go to @TheresaMcCabe. >To submit a news tip, send an email to: firstname.lastname@example.org.