Howard Stern’s TV judging stint a boost for Sirius XM
Howard Stern is going to be a judge on the NBC show “America’s Got Talent,” this summer and Wall Street is already betting this is going to benefit the shock jock’s satellite radio home, SiriusXM Radio.
Stern, who will replace the less potty mouthed Piers Morgan, will raise the profile of his radio show and drive new subscribers, at least one analyst said on Thursday.
“We see this as a positive for Sirius, holding potential for free on air-promotion, positive for awareness and sub growth, depending on how the TV show fares,” said Lazard analyst Barton Crockett in a research note.
His new gig won’t effect his current job, where he is locked down until 2015. What’s more, the show is even moving its production to New York from Los Angeles, so the east coaster Stern can have an easy commute.
Stern inked a five-year deal Sirius XM last December that nets him about $80 million a year, according to analysts. He brought an estimated 1.2 million subscribers to Sirius when he joined the fledgling satellite radio company in 2006.
There is no word yet on whether Stern will tone down his colorful vocabulary for network TV.
Howard TV, which is a televised version of his radio show, is available on demand from cable providers, including Comcast, the parent company of NBC.
Sony’s Sir Howard Stringer makes fun of News Corp hacking scandal
On the same day that James Murdoch was fighting for his career at a parliamentary hearing on Thursday in London, Sony’s CEO Sir Howard Stringer was making fun of the whole situation an ocean away.
At a fancy breakfast hosted by News Corp’s Wall Street Journal in New York (where Sirius XM’s CEO Mel Karmazin was in the house), Stringer was the guest of honor. WSJ editor Robert Thomson kicked off the Q&A session introducing Stringer, who later took the opportunity to show off one of Sony’s new products, a pair of binoculars that can be used to record video or pictures in 3D. That’s when Stringer seized the moment to turn the breakfast into an impromptu roast about News Corp’s woes. Wielding the binoculars, he said:
“These are 3D binoculars. I venture it got good reviews. The Wall Street Journal will equip all their reporters with this. And if you think hacking the Royal Family is fun with phones, this is the ideal device. If you stay at the Hotel InterContinental Hyde Park, you can actually gaze into Buckingham Palace with these. I am telling this to (Thomson), wherever you are. Did you leave already? This is for you. This is for you. Video recording or stills.”
When I caught Stringer on the sidelines after the event, he admitted his stand-up routine “was a bit dangerous.”
from Summit Notebook:
Sirius CEO Karmazin limbers up for the Howard Stern dance
It’s been five years since Sirius lured shock jock Howard Stern to satellite radio with a $500 million contract. Whether Stern can re-up with a similar deal when his contract expires at the end of next year is anyone's guess, but it ought to be entertaining. Sirius XM CEO Mel Karmazin is preparing himself for negotiations with the self-proclaimed King of All Media.
In a meeting with reporters at the Reuters Media Summit on Monday, Karmazin gave us a thumbnail sketch of his version of "The Art of the Deal."
“I could tell you, it will start with Howard feeling that he is working too hard and doing too many shows and not making enough money. Our side would say, 'We want you to do more, and get less money,'” Karmazin said.
“That would be how we would go into the room once the time came to go into the room. And the hope would be that we would come out with Howard staying with our service,” he said.
Karmazin praised Stern as “a talent like no other in radio,” but would not say whether such a talent was still worth a half billion dollars.
“You have to now assume that the negotiations are at a stage where everything is in print, so if I were to say, yes, we got every penny's worth, Howard would come in with that piece of paper and say 'See? I sold myself too cheap,'” he said.
Stern is one of the biggest draws of Sirius XM’s satellite radio service, which counts 18.5 million subscribers. His decision to exit FM radio for Sirius in 2004 is credited with establishing satellite radio as an established form of media, though some analysts have also noted that high-priced contracts like Stern’s contributed to financial woes that pushed Sirius to the brink of bankruptcy earlier this year.
Live blog from the Reuters Global Media Summit
Reuters reporters will be sending live updates from interviews with guests including Disney’s Anne Sweeney, IAC’s Barry Diller, WPP’s Martin Sorrell, Sirius XM’s Mel Karmazin and more.
Better days ahead for Sirius XM?
Sirius XM Radio has reason to be excited about the success of the cash for clunkers program. The satellite radio operator, which posted quarterly results this morning, raised its income outlook for the year on a potential rebound in car sales.
Chief Executive Mel Karmazin said on the earnings call that he was cautiously optimistic that auto industry sales will pick up in the second half of this year.
After all, any increase in car sales translates into more subscribers for Sirius XM, which gets most of its new users from satellite radios built into cars.
Investors have been optimistic about Sirius’s stock all this week, given the launch of its iPhone software and the government’s Car Allowance Rebate System, which lets people trade in their old vehicles for rebates on new, fuel-efficient cars. Reuters’ Franklin Paul wrote on Tuesday:
The U.S. government’s popular “cash for clunkers” incentive program has added spark to the idea that auto sales may rebound after a four-year decline. By allowing people to trade in old vehicles, the program has lifted industry-wide sales back above 11 million units on an annualized basis.
What’s more, Barrington Research analyst James Goss told Paul that Sirius converts about half of its users who get trial accounts when they buy a car into paying customers.
Now, only time will tell whether the optimism lasts, both in the beleaguered U.S. car industry and among Sirius shareholders.
I can’t believe this company is doing very much “right”. I am a perfect example of future churn and lost customer forever. I had a Sirius S50 which failed several times. Sirius sent me a refurb Sportster 4 (with no disclosure or agreement) and included a boom box in the package. I was so impressed I decided to keep the s50 active and paid to have BOTH UNITS. The Sportster also was not dependable, intermittently cutting out for the first 10 or 11 months, and that unit finally quit altogether (I purchased an extra antenna which didn’t help). The S50 had given up the ghost a couple weeks earlier, so I called Sirius. They were not helpful, and I asked if I could just cancel and was told I could, WITHOUT OWING ANY ADDITIONAL MONEY. They deactivated my account, and then BILLED MY CREDIT CARD $66.53; they were obliviously unconcerned when I called them about the failure to disclose this impending charge.Now I’ve bought my wife a new car which has XM installed; MANY soliciting mail and phone calls started right away, but nobody would even listen to my concern that Sirius/XM might not be a company I wanted to do business with because no human being would call me back about that charge. All the high prssure sales persons would do was to repeatedly read from a company “pitch line”, totally ignoring that I wasn’t a happy former customer. I now have one deactivated XM radio in a new car, and two broken Sirius radios in the closed for which I will never trust the service provider enough to do business with.
Sirius unveils iPhone App: reviews not so good (updated)
Sirius XM Radio has launched its long-awaited App for the iPhone to mixed reviews. That’s not surprising, really, since the legion of Sirius subscribers has never been sheepish about the pay radio service.
Many users like it, so they can get unique programming in a slick iPhone App. Now they can take Martha Stewart Radio, Road Dog Trucking and the Praise Channel with them anywhere. But you can’t listen to exclusive stuff like Howard Stern’s programming, or Major League Baseball games or the Nascar channel. Ouch.
It’s true that only a handful of channels are excluded (for rights reasons) versus the 120 channels one can listen to. But many Sirius XM subscribers are drawn to the service primarily for Stern, Baseball and the NFL, and they are not pleased. Of 421 user reviews on the iTunes App Store, 261 rate it 1 (out-of-5) stars, and its average is 2 stars. By contrast, online radio app Pandora scores an average 3.5 stars (from a much larger survey sample).
For every Sirius App comment that sounds like this from “Garfinkel”:
The app itself works pretty well. It’s been streaming without a glitch…” (3 Stars)
…there are three that read this way from “MXIKN”:
App shows great promise. Glad I didn’t renew my subscription cause there is no HOWARD. What are they thinking? I’m willing to renew if I can get Howard Stern. Many others will agree with me. Give us what we want. (1 Star)
Stern is not required for me to live. The only show that I miss by not having the Stern channels is Ferrall. Overall this is a great application and love it. There is more to Sirius XM than Stern, a lot more exclusive content than anywhere else.
Sirius: Rumors of our near death? It was the media’s fault
It’s the media! That’s what Sirius would have us believe.
On a post-earnings call on Thursday executives said the company’s precarious financial position during the last few months as it sought to resolve a looming debt debacle was exacerbated by the media’s interest in Sirius. Apparently, stories about companies going bust not only upset investors and creditors, but customers too.
Sirius XM President of Operations Jim Meyer told Wall Street analysts he’s excited to have completed the debt refinancing and merger between Sirius and XM so the company can assure customers it will be around for a while.
There certainly was headwind associated with both the confusion of putting the two companies together and the overall just unbelievable amount of news and press that we have seen really in the fourth quarter and continuing in January and February on the financial condition and refinancing of our balance sheet.
CEO Mel Karmazin agreed:
It’s particularly sensitive for us because people prepay their subscriptions in large part. So the idea of all of the noise in the market certainly when you are asking somebody to prepay and buy a year in advance or something like that, obviously has an impact.
Sirius will be around for a long time. Even with new devices coming out, and car companies installing devices to make listening to music easier, Sirius has the core infrastructure allowing them to produce new ways of “listening” to radio.
This stock is going back to $9. It may not be tomorrow, but once their debts are paid up, profits will be right behind. 20 Million Listeners are not going to just throw in the towel.
BUY BUY BUY
Dish’s Charlie Ergen: Me and Mel don’t have a beef
Ah the media, we love a ruckus. We really do. And when the two pugilists are characters as colorful and savvy as Dish Network’s founder Charlie Ergen (left) and Siriux XM Satellite Radio CEO Mel Karmazin (right) we do really get excited.
If you remember, Ergen was widely reported last month to have made a back door bid to take a stake in Sirius XM by quietly buying up some of the satellite radio company’s outstanding debt. Analysts and experts came up with all kind of theories as to Ergen’s ambitions including taking complete control of Sirius on the cheap, combining various satellite assets, and kicking Mel out.
At the time Ergen ‘s official channels at Dish and EchoStar declined to comment on the matter. So today’s Dish earning call was the first time we heard from the man himself on the matter. Well, it turns out the press was right on most things connected with the Sirius bid, according to Ergen. Except for one thing: he does not have bad blood with Sirius CEO Karmazin.
Here’s Ergen from the conference call:
I would take this opportunity to say one thing that clearly was not true is there wasn’t, at least I can speak for my end, there’s no annimosity toward Mel, Parsons [former XM chair] or anything like that.
I don’t know where they got that. Certainly not from our side.
Really?
Maybe the stories of an old feud were overplayed, but there might have something other than pure cold financial logic that influenced Mel’s final decision on this deal. Liberty Media beat Ergen in the bid for a stake in the beleaguered satellite radio business by offering to pay off Sirius’ due loans. In an interview with Reuters shortly after winning the Sirius bid last month, Liberty Media CEO Greg Maffei implied there may have been some… ahem, personality issues in its favor.
Liberty: Stern is safe — for now
So after two weeks of following all the twists and turns of Sirius XM’s attempts to avoid bankruptcy, CEO Mel Karmazin decided on John Malone, founder of Liberty Media, to come in as Sirius XM’s white knight with a $530 million loan . The loan will cover the satellite radio provider’s looming debt and help it avoid bankruptcy. As part of the deal Liberty will eventually take a 40 percent stake in Sirius’ equity.
But does this mean the big money deals that Karmazin signed with the likes of Howard Stern, Oprah Winfrey and Major League Baseball will get re-worked at a more favorable rate for the company now that there’s a new major stakeholder?
No, says Liberty Media CEO Greg Maffei in an interview with Reuters.
You can look and say some of these content deals were cut at a time when there were two guys (Sirius and XM) bidding against each other in a relative frenzy. Having said that, a lot of these content relationships like Howard Stern are very valuable to this company, have been important in building the company, and are likely to be important in sustaining it.
But Stern isn’t quite out of the woods.
I’ll rely on Mel and his team to think about how those content relationships look going forward and make the right decisions,” said Mafffei. “All those content (deals) have some term and they’ll get renegotiated or reset at that time for the value that they’re then creating.
With Sirius generating net operating losses which hit $217 million in the third quarter, it would make sense that Liberty might suggest that Karmazin looks at trimming one of its biggest outgoing cashflows: talent costs. But Mafffei seems not to agree.
I too would probably dump SiriusXM without Stern. That said, I do love the music channels and also tuning into Foxnews during breaking news. It would be harder without Stern.
Sirius XM shares are — wait for it — higher!
Sirius XM shareholders have seen a lot of dark days — face it, we’re talking about a stock that dropped to 15 cents a share. But today isn’t one of them. At least so far.
Indeed, shares of the satellite radio company jumped 100 percent after Liberty Media Corp agreed to lend it $530 million, allowing Sirius XM and its leader, Mel Karmazin, to sidestep a debt crisis.
The deal comes after a breathless week during which Sirius XM came under threat from EchoStar Corp and its top man Charles Ergen, a longtime rival of Karmazin, and looked very close to bankruptcy.
Now, Liberty Media Corp and yet another media mogul, John Malone, have come to the rescue. Here’s the deal, according to Reuters:
Under the agreement, Liberty would first provide a $280 million senior secured loan to Sirius XM, of which $250 million would be funded on Tuesday to help the satellite radio company repay $171.6 million in convertible notes maturing today.
