Over the past decade, Stern and SiriusXM have thrived together. In 2004, when Stern announced he was moving his hit show from broadcast radio, where it was syndicated on 46 major markets around the country and attracted an estimated 20 million listeners, to satellite radio, where the majority of Americans wouldn’t hear it, lots of people thought he was crazy. It was unclear whether significant numbers of people would pay for satellite radio when they could listen to AM/FM for free.
But with Stern on board, Sirius’s fortunes took off, its subscriber base swelling with acolytes incanting “Baba-Booey!” and “Hey now!” Sirius quickly caught up with, passed, then acquired its rival, XM Satellite Radio. After surviving a rocky patch during the recession, SiriusXM has emerged in recent years as a growing, profitable business. It has 27.3 million paying subscribers. Last year the company had earnings of $1.4 billion before interest, taxes, depreciation, and amortization on $4.2 billion of revenue. On paper, the marriage between Stern and SiriusXM has never been better. Yet its future remains in limbo. Stern, who declined to be interviewed for this article, hasn’t said if he intends to extend his contract.
“The Howard Stern Show is still the single most important piece of content that SiriusXM has—and the most expensive,” says Barton Crockett, an analyst with FBR Capital Markets. He estimates that Stern’s contract costs his employer about $80 million a year. “I think he’s worth every penny. It would be great for them if they can keep Howard Stern.”
In the past, Stern has always let his contract decisions go down to the wire. He has nine months to entertain offers and let the drama play out on his show. “Never think of me as a disc jockey,” he said on-air last July. “Because the one thing that matters to me more than anything after all these years in radio is that you treat me with respect. I’m sick and tired of how management speaks to talent. Talent is what drives this world. There is no Sirius without talent. Doesn’t matter how many satellites you f—ing stick in the air.”