Sirius XM Slashing Salaries

NEW YORK ( TheStreet) -- Sirius XM ( SIRI) is slashing salaries in a bid to cut costs, after signing a number of expensive deals with celebrity talents such as Howard Stern, Oprah Winfrey and Martha Stewart.

Radio personality Bubba the Love Sponge told the Hollywood Reporter on Tuesday that he chose not to re-sign with Sirius when his contract expired at the end of 2010 after executives told him his salary would be cut by 80%.


"They've asked everybody to take a pay cut," Bubba told the Hollywood Reporter on Tuesday. "With me, it was a take it or leave it offer. We decided to leave it."

During the past week Bubba kept his fans up-to-date with information regarding his negotiations with the satellite radio company via Twitter.

On Dec. 31 Bubba tweeted "Ok it's official I'm done... I'm my own boss now!!" followed by "As of midnight tonight my name and all content will be removed from Sirius/XM."

Sirius shock jock Howard Stern may have also been asked to accept a lower salary when he signed a new 5-year deal with Sirius XM, less than a month before his 5-year, $500 million contract with the company was set to expire last year.

Analysts predict that Stern agreed to a 20% pay cut which bumped his salary down to $80 million a year from the previous $100 million.

Bubba was reportedly raking in $1 million a year through his contract with Sirius, but the company wanted to cut his salary to $200,000 a year.

Sirius XM has not responded to requests for comment.

Gaining and retaining talent is a costly and key aspect to Sirius' business. In 2009, the company reported that it spent $370.5 million on programming and content, including the costs to acquire, create and produce content.

Loss of talent is cited as one of the primary risks to Sirius' business. "There can be no assurance that this on-air talent will remain with us or that we will be able to retain their respective audiences," the company said in its 2009 annual report. "As these agreements expire, we may not be able to negotiate renewals of one or more of these agreements."

Bubba had been at Sirius for 5 years during which he was able to agree to several contract terms with the company.

"Three times we were able to do a deal. This time we came to an impasse," he said. "I didn't think an 80% pay cut was fair market value for my services."

Bubba can now be heard at radioIO.com, an Internet radio station owned by ioWorld Media.

"They gave me a fairly lucrative base salary, plus incentives like stock and commission on subscribers. It's far better than Sirius ever was," he said.

Bubba said via Twitter that he is planning on holding a press conference today, Wednesday, Jan. 5 to discuss his new plans.

-- Written by Theresa McCabe in Boston.

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