Sirius CEO Karmazin limbers up for the Howard Stern dance

November 30, 2009

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.

Stern is not the only big personality whom Karmazin may face at the bargaining table; Oprah Winfrey’s contract for her Sirius talk show ends in 2011. While Karmazin said he has not yet had talks with Oprah, he said that satellite radio could become a more valuable promotional tool for Oprah once she quits her broadcast TV show.

Asked whether Oprah or Stern was the tougher negotiator, Karmazin said both previously got the best of him.

“I’ll tell you who was the worst negotiator: It was always Mel because they got all that money from me.”

47 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Sirius will collapse if Stern leaves. He should start his show at 4:00 PM so that he can stay out late at night and try to hold onto Beth who is losing patience with his going to bed at 8:00 at night. Stern leaves Sirius: Sirius loses 10 million customers and goes belly-up. Stern stays: we get an afternoon show and he gets a billion dollars for the next 5 years. Mark Montgomery boboberg@nyc.rr.com

Posted by Mark Montgomery | Report as abusive

Let him go. No way he is worth the money. I have XM for O and A. The music is also the draw. Where would Howard go? No where as good as he has it now. He is worth a couple million tops per year.

Posted by mark harrick | Report as abusive

Oprah ROBBED XM. Useless,

Posted by dbldoofus | Report as abusive

I agree wholeheartedly with Mark. Howard’s major complaint over the years has been the early hours. I purchased Sirius to listen exclusively to Stern. If he signs, I would not be surprised if he moved the show to the west coast and start broadcasting around noon PST. ( 3pm in the east ). The show will still be fresh (tape to broadcast) 15 hours later. If he doesn’t sign , I doubt if I would ever listen to Sirius. John Thompson – OH

Posted by John Thompson | Report as abusive

wait a second… Sirius XM has about 20mil subscribers total (maybe a bit more)… lets be generous and say that half originally came from Sirius and half from XM… so you’re saying that all 10 million Sirius customers will leave is Howard is gone? excuse me, but “wha, wha what?”i have sirius in my car… i like howard and have listened to him since his WNBC days… but he’s not the only show i listen to on Sirius… on days when he’s boring (or on vacation) or when the mood hits me i tune over to Opie and Anthony, or Mad Dog or BBC 1 or Bluegrass or CNN or Fox News or… you get the idea…howard is a unique broadcaster and talent, no doubt, and perhaps even has one of the most listened to programs… he may even be ‘irreplaceable’… but that doesn’t mean Sirius XM should keep him at any cost… things change and i assure you on that day when howard finally broadcasts for the last time, anywhere, his legion of fans won’t be puncturing their eardrums… they’ll simply find something else to amuse/entertain them.

Of all the folks I know who have Sirius, and it really isn’t that many, 95% of them are Stern fans that pay a premium to hear him; myself included. I find satellite radio to be cumbersome, hard to use while driving and just not that great; but I need my Howard Stern Show fix. In fact, my Sirius receiver in the trunk of my car forever on Howard 100; otherwise, I listen to my ipod. If Sirius loses Howard I think Mel can start doing some research on filing for unemployment.It was explained on his show today that even if only 6 million people, of the approximately 19 million subscribers, subscribe because of Howard, that’s $960 MILLION per year — add up the very loyal sponsors like Becks, and I would say Stern pays for himself and beyond.Don’t cut off your nose to spite your balance sheet, Sirius.

Posted by Sean Brennan | Report as abusive

That guy above me is a moron! That said I don’t want to see Stern leave and I don’t think he will leave. He’s a nobody without a Microphone and he knows it.

Posted by Tom Sommer | Report as abusive

Howard who?

Posted by longislandsurfer | Report as abusive

ha, my antispam word was broad. how fitting (artie). but i agree totally. I will cancel as soon as he is gone and i want bubba back as well. get rid of oprah and madog types. pay them and thrive!bababooey

Posted by tom dobmeier | Report as abusive

Let him go. His obscene contract has kept SiriusXM from ever being profitable or reaching it’s true potential. Besides, he hasn’t been funny or original for many years.

Posted by sean kelly | Report as abusive

WHERE THE KING GOES I GO. HE STAYS I STAY HE LEAVES I LEAVEBABABOOEY !!!!!!!!!!

Posted by NYCriminal | Report as abusive

Sirius cannot exist without Howard Stern. I will definitely cancel my subscription if he leaves.

Posted by Charles Steet | Report as abusive

Sirius doesn’t need Stern anymore. XM had over 6 million subscribers without that old has been Stern. His show was once great but now not so much.

Posted by MelsRug | Report as abusive

I predict a Tues-Wed-Thurs 3 day work week for the KOAM, special programming Mondays, and best-of-the-week on Fridays

Posted by Joe M | Report as abusive

Nothing will happen if Stern leaves. Opie and Anthony have been neck and neck with Stern’s numbers and work 5 days a week unlike Stern. Opie and Anthony XM channel 202, Sirius 197.

Posted by Ted Sheckler | Report as abusive

I am a Sirius subscriber who will drop the service if Stern isn’t there. Period. I can get music from my iPod, political discussion from talk radio and NPR, and news from conventional sources. But I can’t get the Stern show anywhere else and it alone is worth 12.95/month. At least six million subscribers (Sirius’ data) feel it’s worth the cost. That means Howard’s listeners are paying 4.162 BILLION above his 500 Million contract. He’s earning a healthy profit for Sirius, and I don’t think anyone else approaches his numbers.

Posted by Dan | Report as abusive

If Stern leave Satellite radio will have to change its business plan and maybe include commercials on some channels and present unique stuff you cant get on terrestrial and maybe pickup some new stuff that they dont have right now.All in all it might make them thrive as they are probably depending on Stern too much now.

Posted by Johnny Canuck | Report as abusive

I have Sirius in my car and office and would not have such without Howard – period, end of story.

Posted by M. Scott | Report as abusive

I’m out of the country, so my 3 year renewed contract got canceled a few months ago… however, of all the channels to choose from, I would say Howard and team is great entertainment, but really was less than 5% of my listening. So if I had the service, or when I have the choice to get it when I come back, and Howard isn’t there? I think it would depend on the whole picture, say Howard leaves, and some fresh new talent comes in. I think I would re-up. It is a business decision after all… I might want the BMW 760Li, but I can only afford a 545i used. In the long run is it really that bad?

Posted by jimmy cee | Report as abusive

In the beginning, my whole interest with Sirius was Howard, but they have enough content to stand on their own.Maybe move his channels to a different payment tier, so his fans could pay to keep him around?

Posted by Bob | Report as abusive

Stern leaves…I leave. If you want to guage the number of Stern fans and their loyalty then look up how many books Artie Lang sold. His book debuted at number one on the New York Times best seller list. DUH!

Posted by terrence | Report as abusive

They should just let Howard Stern go and let some of the money they would have paid him flow to the bottom line. Howard’s show is tired, boring and not nearly the entertainment value of some other radio shows. I’d cast my vote for the Bob and Sheri Show out of Charlotte. Their show has very broad appeal with younger Boomers and is genuinely funny and entertaining. Put Howard in the category of grossly overpaid for a mediocre show.

Posted by Brian | Report as abusive

I purchased Siruis to get Howard, and recently cancelled. The Howard Stern Show is becoming a soap opera, to much drama and harder to listen to. And shows like the wrap up show, bubba and other quirki shows don’t interest me. The music channel’s play the same songs over and over. I now buy parts of Howards show “interviews”, etc… off the internet and put them on my ZUN.

Posted by S Green | Report as abusive

At about $150 a year per subscriber, it takes fewer than 700,000 subscribers to pay Howard’s current $100M salary. He’s brought far more than to Sirius even by the lowest estimates. From a business standpoint, you can’t say he’s overpaid or that he’s responsible for the company’s financial problems.

Posted by Thom | Report as abusive

I bought into Sirius for Stern. The show back then hit the ground with its feet running – but now barely limps along. It’s no longer interesting, or relevant. I’m about to cancel my service and go back to terrestrial. The content may not be as good when you consider the plethora of channel choices, but let’s face it – the reception is ‘iffy’ at best with satellite.I would seriously reconsider if Sirius could get talent like Phil Hendrie.

Posted by Revolution9 | Report as abusive

I got Sirius for Howard and those of you who say he’s not as great as he once was are dead wrong. His show is consistently topical and always funny. If he doesn’t renew his contract (which I think he will renew), I will cancel my subscription as well. Love my Howard and Artie and yes, even Bababooey too!

Posted by Love Howard and Artie! | Report as abusive

I’m a Sirius subscriber, and I resent having to pay the extra money for Stern and Winfrey. I do not listen to either, and it’s difficult to imagine the mindset that would want to.Karmazin should cancel both of these yahoos, lower the Sirius subscription rates, and reap the whirlwind of new subscribers.

Posted by Steve Adams | Report as abusive

I adore comments like above. I would venture to guess that S Green, above, has followed Howard for years. S. Green has probably simply grown up, and outgrown Stern. The demogrpahic of Howards audience stays flat while people outgrow him. However, the good news is, there are just as many younger listeners replacing our aging community.I do agree with the music stations becomming stagnant, probably has a lot to do with the royalties paid, but I thought we would be past this 10 years later. I remain committed, I believe because I have one of the radios that captures songs for later playback. I have thousands of songs saved and are always great to revisit. Now that I have moved from the Iphone to Droid, I have no way to tag music via the new skydock. Oh and BTW, dont switch to Droid, its cute and fun, but acts like a PC and locks up constantly, does not compare to the Iphone, you can read my serious review of the droid at http://www.jimmylegg.com, and select the blog.

It is estimated that Stern has somewhere in the range of 5-6 million listeners. Sirius went from 600,000 listeners in 2004 when the Stern deal was announced and by January of 2007 Sirius was up to 6 million. I think there may be a link……..If Stern leaves I would think there is a good deal of people (including myself) would cancel.Here are some rough numbers @ $14 a subscriber1 million drop; $168 million in 1 year, .84 billion in 52 million drop; $336 million in 1 year, 1.68 billion in 53 million drop; $504 million in 1 year, 2.52 billion in 5Raw numbers say sign him and try to get him to stay for less money…….

Posted by ipso | Report as abusive

Howard took the pack off long ago. If it wasn’t for the likes of Sal and Richard nothing on that show would be worth lisetening to. Vacations, Fridays off, 16 hours a week and he’s so over worked, he’s so tired. “Anything else Robin?” is the constant refrain. He doesn’t want to be there and it shows. He’s cashed out and only the sycophants remain loyal as he takes money out of their pockets. Once the contract is up he’s off to Long Island with his hot wife, who will dump him when he gets old and grumpy, and the bulldog. Sad ending to a once brilliant talent. Sound familiar? Artie is done. He models himself after Belushi and Farley and will begin the final crash and burn he’s been working hard at for years. Artie’s a good guy and it’s too bad, but this is fate.

Posted by Dave | Report as abusive

Stern is an over-rated liberal gas bag. We have heard his im tired of working and am not going to renew my contract song and dance every 5 years for a while now. Ever since Stern became Imus lite, he has been nothing but unentertaining. Between his wack-packers that do nothing but beg for money, fake callers that plug his on-demand service and the fact that he has more time off than he is actually on the air (10 weeks plus every friday off) it\’s hard to tell me why I would pay a single penny for this piece of refuse. Go, Stern, take your arm candy with you. Mel, sign Allison Stern, she seems to have been the thing that made Howard great all those years ago.

Posted by sternfan1 | Report as abusive

I subscribed to Sirius for Howard and while I have come to love the other programmming (except the stuff on XM) it would be difficult for me to justify $12.99 plus the new internet stream fee for the service without Howard. Currently I am on a one year subscription, but I would likely switch to monthly so if the service without Howard is not worth the expense I can drop it at anytime.

Posted by C Atkins | Report as abusive

I purchased Sirius 6 years ago (a full 15 months before Howard migrated over). Initially I did enjoy the music channels but I found that getting them with my satellite tv service got the most use – not the car or starmate. Of course, being a 15 year fan of the Stern show, I can say that I’d probably not renew my subscription if Howard chooses to leave. “The show is boring?” Wow, if you’re not a fan then great. It shows. Apparently I (and millions of others) still “get” the show, find it funny and relevant, and will continue to be fans. I certainly hope he comes back. And yeah it IS a “soap opera.” A very good one. PS: Fred rules!

Posted by cagey | Report as abusive

Dear S. Green,Howard’s show is awesome. Go “F” yourself and tune to NPR!

Posted by R Ryan | Report as abusive

I came over from XM and have never liked Howard. If he leaves it will not affect me in the least. I listen to Opie and Anthony and they are more than enough for me.

Posted by john | Report as abusive

howars is not worth 500 million NO puke shokjock or any other personality is tha good for tha amount of money Sirixm will suevive with out them,

The only way I would buy Sat radio is if I lived in the middle of nowhere with no stations or internet. Howard’s show has become a lame joke, boring moronic H100 news, fake bits.

Posted by Ipokesmot | Report as abusive

Howard is the absolute best! If you don’t listen to him because it’s not your type of humor then that’s fine. But anyone that doesn’t think he’s worth the money is a complete d-bag. How many people do Apple and Anthony have that listen to every minute of their show? Enough said!!!

Posted by HFan | Report as abusive

Notice a trend with these comments. You either love him or hate him but even the haters know whats happening on the show that they hate so much even thou its been off regular radio for about four years.They just can’t get enough. HE’S THE KING AND I GO WHERE HE GO’S

Posted by BaBaBooey | Report as abusive

As someone who bought a Sirius radio in fall of ’05 because of Stern, I can’t imagine Sirius surviving without the Howard Stern Show.Maybe I’m wrong, but I haven’t heard anything else on any channel that I would be willing to pay a monthly fee for. If Stern leaves, he would have to be replaced by an equal amount of equally compelling original content that would be worth listening to.

Posted by steevlak | Report as abusive

STERN RULES. Never been better. Nothing even close to it in the whole entertainment industry.Anybody that says any different is a dumb girl, not funny, or not fun.

Posted by mike | Report as abusive

Have not listened to Howard in years. HOO HOO.O and A all the way that’s what i say.

Posted by fujow | Report as abusive

Stern has long been declining from a talent perspective. He basically mails his show in. He was great in the 80′s and 90′s but since Jackie M., left so did Stern’s humor. I would rather watch The View then listen to Howard.Opie and Anthony are the best thing that SiriusXM has. They are truly funny and the only reason I have satellite. If they were ever to leave, you would really see a mass exodus or subscribers. I know many people who share my opinion.

Posted by Fred | Report as abusive

My Father, my sister and I all joined Sirius because of Stern. I listen to other channels maybe 10% of the time. If Stern leaves, I will cancel my membership. Say what you want, but so will many others. They needed Stern to even get Sirius off the ground. I don’t know anyone who has Sirius that didn’t join for Stern alone. I can hook up my MP3 player if I want music. I am not going to pay $12.99 plus the $2.99 internet stream fee for the other Sirius channels.

Posted by Manufracture | Report as abusive

THE FACT OF THE MATTER IS that Howard has made little effort since joining Sirius. The Fridays off and the vacation time have been excessive. But the damning part is that he’s just not into the show and it’s all been a horrible disappointment. I finally gave up my subscription in September of this year. The show isn’t even worth downloading lately. I can’t believe he has the chutzpah to sign another contract, even if Sirius/XM is stupid enough to offer one to him. BRING JACKIE BACK!! btw artiefannetwork.com

Posted by Gordon Wagner | Report as abusive

Howard Stern is the reason I subscribe to satellite radio. He, Rodin, Fred, Bababooey and even Artie light up every morning for me. Maybe they’re not as “edgy” as they used to be because the Opie & Anthony’s of the world have caught up, but listening to the show is still the most entertaining part of my day. I look forward to driving to work, my lunch break and driving home just because I know I’ll have the Howard Stern Show to listen to. The show is completely hysterical and I would absolutely cancel my subscription if Howard doesn’t decide to re-up.

Posted by Steve | Report as abusive

I own a bee removal service and listen to sirius/xm on the job every single day. Originally, I was a fan of Howard Stern’s program with Arthur Lange, Robin O’phelia Quivers and Frederick Norris, but after smiting bees with my sword, nothing cheers me up more the Opie and Anthony program on sirius/xm starring Gregory Hughes and Anthony Cumia. In summation, and to conclude, Howard brought me to sirius, but Opie and Anthony’s program is keeping me at sirius/xm.

Posted by Ted Sheckler | Report as abusive

[...] Howard feeling that he is working too hard and doing too many shows and not making enough money,” Karmazin told attendees of the Reuters Media Summit in Nov. “Our side would say, ‘We want you to do more, and get less money.’ The hope would be that we [...]