Howard Stern says satellite radio will survive

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Posted by on February 12, 2009 at 11:49:45:

In Reply to: Sirius XM Stock Plunges To 5 Cents A Share posted by on February 11, 2009 at 22:25:51:

Howard Stern says satellite radio will survive
Thu Feb 12, 2009 6:33am EST, Reuters

His defection marked a turning point for the nascent business of satellite radio, with both Sirius and larger rival XM Satellite Radio paying millions more to sign other talent and attract listeners to their subscriber model.

In January 2007, Sirius paid Stern a bonus of 22.1 million shares, worth nearly $83 million at the time, for surpassing subscriber goals set in a five-year contract in 2004 that had stunned the radio world with its $500 million pricetag.

RBC Capital Markets' Bank did not rule out the possibility that Stern may choose to renegotiate his terms to help out the company or even opt out of his contract altogether.

"I think he probably has less of an audience, which is frustrating for him. But is he unhappy doing what he's doing? I don't know. It's an awful lot of money," he said.

A spokesman for Stern did not return calls on Wednesday.

Asked what Stern's next contract negotiations would look like, assuming he wants to renew, James Goss at Barrington Research said: "Let's presume the company remains intact. I don't know if a contract of that nature would be written. If they lose him completely, it's likely a certain amount of listeners wouldn't stay."

Stern himself did not mention his contract on his show.

"It's a very unusual business," he said of satellite radio. "It has something like 20 million people listening to it. There's a tremendous business ... Don't get fooled by what you read."

(Reporting by Sue Zeidler; Editing by Gary Hill)

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