Stern's Getting Sirius (9:04am October 6, 2004)

From insideradio.com: Howard Stern says "two days ago I signed a contract with Sirius Satellite Radio." He'll jump to Sirius in 15 months when his contract with Infinity expires -- and says Sirius is giving him not one but three channels to program. Stern says "Viacom has done a marvelous job of supporting me" but says the indecency bill on Bush's desk and the Washington crackdown pushed him to leave terrestrial radio. Howard says Viacom offered him a new five-year contract starting in January 2006 -- but he's "tired of fighting." Stern says he knows his news could affect the Viacom stock price and that he hasn't even told his parents about his big switch. Let's also watch the Sirius stock price today.

Click Here to read the Sirius press release.

"Shock jock" Howard Stern will jump to Sirius Satellite Radio in January 2006, moving his controversial show from the public airwaves and giving the nascent satellite radio sector a big boost.

"I've decided what my future is," Stern told his millions of listeners in a live announcement of his five-year, multimillion dollar contract. "It's not this kind of radio any more."

By luring Stern away from his current employer, Viacom Inc.'s Infinity Broadcasting, the $500 million, five-year deal announced on Wednesday by Stern and Sirius will propel the new business built on attracting subscribers to dozens of radio stations broadcast digitally.

Sirius, whose shares rose about 14 percent to their highest level in more than two years in early trading, gets a boost in its rivalry with its larger competitor XM Satellite Radio Holdings Inc.

It also offers Stern a degree of freedom for his often off-color show, which includes such segments as "Lesbian Dial-A-Date," in which he plays matchmaker in a mock game show that has been criticized as being offensive. Stern was dropped earlier this year from several stations.

Sirius currently has more than 600,000 subscribers, a small amount compared to Stern's current audience of 12 million listeners on broadcast radio, where he ranks No. 1 in 46 large markets across the country. Stern's radio show corners the market among males 18-49 years of age and ranks No. 1 in many of the 46 major markets where his show is broadcast now.

Infinity, a subsidiary of Viacom (VIA), has about 185 stations in 40 U.S. markets, according to Hoovers.com.

The U.S. Federal Communications Commission regulates radio broadcast programs but does not regulate satellite radio programs.

An Infinity spokesman was not immediately available to comment.

Indecency on the airwaves became a national issue in January when Janet Jackson bared a breast during the National Football League's Super Bowl half-time show on CBS, which is also owned by Viacom.

Soon after, Clear Channel Communications, the nation's largest chain of radio stations, dropped Stern from its stations in six markets, including San Diego and Pittsburgh, after federal regulators complained about his raunchy humor.

Since then, Clear Channel Communications, which kicked Stern off six of its stations, was fined $1.75 million by the U.S. Federal Communications Commission to settle all indecency complaints.

In August, XM, which boasts more than 2 million subscribers, signed bawdy morning talk show team "Opie and Anthony" to one of its premium channels beginning this month. The two were fired by Infinity in 2002 after they broadcast a segment on a couple purportedly having sex in a prominent New York City church.

XM charges an additional $1.99 a month on top of its regular $9.99 monthly fee for the service. In contrast, Sirius will make Stern's show part of its $12.95 monthly service.

Sirius said it would need to add 1 million subscribers to cover the cost of the five-year deal. The company estimates total production and operating costs for the show to be about $100 million annually.

The company is betting its subscriber rolls will rise sharply, but it said it does not expect that to occur until after his show goes on the air in January 2006.

Stern's show often features sexually explicit remarks and off-color humor. In June, Stern announced his show would go on the air in nine new markets owned by Infinity, including four where Clear Channel stations dropped it.

"I'm tired of the censorship," Stern said

"The FCC ... has stopped me from doing business," Stern said. "... Clear Channel, you (expletives), I will bury you."

Like cable television, satellite radio does not have to comply with federal indecency standards because it is only available to paid subscribers.

By luring Stern, Sirius gives itself a boost in its rivalry with its larger competitor XM Satellite Radio Holdings (XMSR) but also gives a shot in the arm to satellite radio overall, a business that is built on attracting subscribers to dozens of radio channels that are broadcast digitally.

Sirius CEO Joseph Clayton called the signing "without a doubt, the most exciting and transformational event in the history of radio."

Sirius reaches more than 10 million DISH Network satellite TV and Sirius Satellite Radio subscribers nationwide, providing listeners with more than 120 channels of commercial-free music, sports, information and entertainment.

The Wires - National (October 7, 2004)

Stern: Fun Lost In Terrestrial Radio... Howard Stern also said to listeners this morning in announcing his move to Sirius that after sitting with agent Don Buchwald, he decided not to go on with radio. "I don’t want to do it anymore. It's not fun for me anymore," Stern said. "I don't know what I'm going to do with my life, but I am ready to leave. It is going to get worse — it is not going to get better." When Sirius approached Stern about a role at the New York-based satcaster, Stern said he "got approached to do something spectacular. I sat down and met with somebody about what they were building for the future." But Stern wasn't immediately convinced that he wanted to be on satellite radio. He said, "Five years ago I considered such a move, but the timing wasn't right. It would mean radio's biggest star would be leaving terrestrial radio." But, he explained that radio is "too restrictive. And I'm tired of the fining and can't sit there and fight the button." Stern then asked himself, "What if I was to build satellite radio from the ground up. That would say that it has arrived. Radio's biggest star removes himself from the airwaves and makes a commitment to what needs to be done. I believe satellite is the future of radio. Of course, I would hope that my team would come with me if they want to."

Strong Praise For Viacom From Howard Stern... In making his announcement this morning that he would be joining Sirius, the WXRK/New York-based syndicated morning host took time out to note that Viacom has done "a miraculous job" in supporting his show. "Leslie Moonves has been fabulous to us, giving us as much freedom as possible under the circumstances," he said of Infinity's top executive. "The way we do radio now has become unimportant. Not only do we have two guys hitting the [dump] button here, there's a button in every market we are in." Stern added that he was fired in "many places in my career because my show was too outrageous," but said, "radio and me — we're one. We were married at five. I was doing my own radio show in my bedroom."

The Wires - National (October 8, 2004)

Insideradio.com: How long will Howard Stern keep talking about Sirius? He spent more than an hour discussing his move to Sirius today. WXRK GM Tom Chiusano asked Stern to "cool it" -- but Stern proceeded to put listeners on the air who congratulated him and said they're buying "Stern Stock" -- a.k.a. stock in Sirius satellite radio. And in fact "SIRI" was up again today.

Howard Stern's program is No. 1 in its time period in New York and No. 1 in Los Angeles among English language stations, according to Infinity spokeswoman Karen Mateo. In a telephone interview, Stern said his current predicament made it necessary to take a big risk. "I got into the medium to change things, to be different, to be funny. And increasingly what's happened is that material I want to do on the air, I can't do. ... The rules are changing so rapidly and are so restrictive, especially for me." While Stern for some time has mused on-air about the allure of satellite radio, the timing of the deal took fans and industry observers by surprise, given that Stern still has more than 14 months left on his current contract. Signing a household name like Stern could be a game-changer for satellite radio, luring millions of new subscribers and spiking ad revenues. (While the music channels on Sirius and XM are commercial-free, the talk, sports and news channels often are not. "It validates satellite radio as an industry,'' said analyst April Horace of Janco Partners Inc., a Colorado investment banking firm. (read more - Scott Collins-LA Times) (read more - Benny Evangelista-San Francisco Chronicle)

Howard Stern has long had two words for the Federal Communications Commission--and in 15 months, he can finally utter them on the air. Howard Stern's move to Sirius Satellite Radio will unlock the one key regulatory advantage possessed by the satellite radio industry: Stern can finally say exactly what he wants on the air. The Stern move may expose traditional radio's Achilles' heel: Stations' free use of the airwaves makes them subject to unique content regulations by the Federal Communications Commission. Sirius Satellite Radio's $500 million deal to land shock jock Howard Stern was seen yesterday as a coup that could do for satellite radio what ``The Sopranos'' did for HBO and cable TV. That's got traditional radio stations worried, observers said. ``Howard will not be subject to the same constraints that he is . . . on terrestrial stations,'' said Jack Casey, general manager of WERS-FM (88.9) (read more - Greg Gatlin-Boston Herald) (read more - Forbes) (read more - Middletown Journal) (read more - Bruce Westbrook-Houston Chronicle)

In an unscientific poll conducted online yesterday by www.newsday.com, 58.2 percent of the 837 respondents said they would be willing to subscribe to Sirius to hear Mr. Stern's show, according to the Long Island-based Web site. The bigger question, though, for radio purists, is what kind of show Mr. Stern will bring to satellite. Sirius' announcement calls it "the most important deal in radio history." That's an exaggeration, but only a slight one. Satellite radio signed on three years ago. Charles Segrest, who installs the systems for clients, says once his clients experience satellite radio, many wish they had subscribed to it sooner. So, does hundreds of digital music and talk channels... many without commercial interruption, mean that traditional FM and AM stations are on their way out? Satellite radio may be making great strides in programming and customers, but for those in broadcast radio, they see it as a challenge that raises the bar for broadcast stations (read more - Christian Toto-Washington Times) (read more - Stuart Burson-KTRE 9) (read more - Tim Cuprisin-Milwaukee Journal-Sentinel)

Howard Stern plans to be on the airwaves after 2005, but if his fans want to hear him they'll need a new type of radio. He has signed a five-year contract to jump to satellite radio service Sirius as of Jan. 1, 2006. Stern won't come cheap. Sirius says it expects to spend $100 million a year for the show's cast and staff, overhead, programming costs and construction of a special studio for the show. But Sirius says the contract will be paid for if Stern brings in "a small fraction of his weekly audience." Even neutral observers tended to agree with that assertion yesterday. Michael Harrison, editor of Talkers magazine, a leading radio trade publication that is based in Springfield, said Stern's move will "act as a catalyst to satellite radio getting bigger faster." Adam Jacobson, radio editor for Radio & Records, a Los Angeles-based trade publication, said the deal "will singlehandedly propel satellite radio onto an equal level with both AM and FM" and will "give large radio companies in the US pause as far as understanding how far satellite radio has come and what a threat it is to them from now on." (read more - Bill Virgin's Seattle Radio Beat) (read more - Don Aucoin and Clea Simon-Boston Globe) (read more - MetroMix)

With Howard Stern looking forward to unbridled free speech when he jumps to Sirius Satellite Radio from Infinity in 2006, industry experts say his home base of WXRK-FM could be forced into making a format change (read more - Crain's NY Biz)

Stern “Swears” Satellite Show Won’t Be Overrun With Profanity (October 9, 2004)

The Wires - Nationwide (October 9, 2004)

Stern's Replacement Selected? While the speculation on who will takeover once he is gone has been running rampant, Howard Stern says Viacom has already contacted his potential replacement.