SIRI HOWARD STERN SIGN NEW MULTI YEAR DEAL Howard Stern, SiriusXM Sign New Multi-Year Deal
4:43 AM PST 12/8/2020 by Georg Szalai
Debra L Rothenberg/FilmMagic
Howard Stern
The satellite radio firm has been the home of the "King of All Media" for 15 years.
Howard Stern, the “King of All Media, will continue to make satellite radio giant SiriusXM his home, extending his long-running deal with the company for his flagship show by five years.
The deal, unveiled on Tuesday, also covers the Stern archive for seven additional years. Financial terms weren't disclosed.
Stern, 66, is currently working under a five-year deal, estimated to be worth as much as $100 million a year, with Sirius that expires at the end of this year. Recent chatter had focused on the new deal being for up to $120 million per year.
SiriusXM's Jim Meyer, who is leaving the post of CEO at the end of this year to focus on the vice chairman role, has in recent months repeatedly said that a Stern deal renewal was a key focus for him, and he was hoping for news on that around the company's third-quarter earnings call on Oct. 20.
Meyer said that he has been "really clear" that "I want Howard Stern to be on SiriusXM for as long as Howard wants to work," lauding their "tremendous relationship" that has "never been better." In July, the executive said talks had picked up steam, adding “we’ll keep working and we'll get there, I hope. At the end of the day, it will come down to what Howard wants to do." Meyer also told a recent investor conference that the deals with Stern have made financial sense. “We have had Howard for 15 years and I am sure that every penny we paid Howard our shareholders have benefited [from],” he said.
Music streaming giant Spotify had been seen as the main alternative for Stern given its growing podcasting business. But B. Riley analyst Zack Silver in a recent report highlighted that the fact that SiriusXM has rights to Stern's back catalog through 2027, “helps lower the risk of Stern joining a rival service."
He also wondered if Stern was "really still worth $100 million-plus a year?" Silver’s response: "Our recent survey work suggests that only a low-single-digit percentage of respondents subscribe to SiriusXM solely because of Howard Stern. That said, we do believe marquee exclusives like Stern help support SiriusXM's premium price point, as well as differentiate the service from other subscription audio platforms. And for investors, we believe that a potential renewal with Stern serves as a proof point that SiriusXM can continue to retain and attract top talent to its service."
Credit Suisse analyst Brian Russo in a recent report estimated that 15 percent of Stern listeners could cancel their SiriusXM subscriptions if he left the company, “implying a potential subscriber loss of 2.7 million.”