Coverage: Howard Stern renews deal with SiriusXM

Howard Stern renewed his five-year contract with SiriusXM for the third time, the company announced Tuesday. No financial terms were disclosed in the announcement.

David Bauder of The Associated Press had the day’s news:

Much has changed for Howard Stern and SiriusXM since their first deal a decade ago – except for their desire to stay in business together.

The company announced Tuesday its third five-year deal to keep Stern’s radio show at SiriusXM, together with a longer-term video arrangement that will allow fans to see as well as hear his program and have access to 30 years of career highlights.

Financial terms were not disclosed. Since it includes a 12-year provision giving Sirius control of Stern’s archives, it is likely well north of the $500 million deal made when he moved from terrestrial to satellite radio in 2006, which was then an important step in establishing a fledgling industry.

Once radio’s ultimate shock jock known for salacious material, Stern at 61 has grown mellower and the show’s signature is becoming its in-depth interviews with celebrities like Bill Murray, Gwyneth Paltrow, Neil Young, Bradley Cooper, Chris Rock and others.

The kind of edgy material in which Stern once specialized is now available widely on the Internet, said Scott Greenstein, Sirius president and chief content officer. His stint as a judge on NBC’s “America’s Got Talent,” which ended this past summer, also presented a different side of Stern to an audience that may only have known his reputation.

“Stern has had to evolve more into what he always was – an amazingly authentic performer, intelligent and authentic,” said Michael Harrison, publisher of Talkers, a radio trade publication.

Paul Bond and Georg Szalai of The Hollywood Reporter had more details on Stern’s former payments from SiriusXM:

When Stern first struck a deal a decade ago to move his show from terrestrial to celestial radio, Sirius was paying $100 million a year for his services four days a week.

Insiders say that Stern’s salary isn’t as much as SiriusXM pays out because much of it goes toward expenses for the show. Nevertheless, Stern has made a small fortune off of SiriusXM, including $250 million in bonuses when Sirius hit certain subscriber milestones earlier in its incarnation.

Since then, Sirius and XM have merged, removing the need for the two to bid against each other for content, presumably driving the price down for talent. Hence, it wasn’t surprising when Meyer acknowledged a month ago that a sticking point for re-signing Stern was how much he’d be paid.

In fact, a seeming pet peeve of Stern’s is any suggestion of a pay cut, given his on-air protests five years ago when journalists reported his annual salary had dropped from $100 million to $80 million but failed to mention he’d be putting in fewer hours.

Stern should have more free time after recently retiring as a judge on NBC’s America’s Got Talent. In 2010, he and Sirius struck a five-year deal, which Stern called his “final five years in radio.”

Ben Sisario of The New York Times explained how Stern’s popularity has grown along with that of satellite radio:

After merging with its rival, XM, and making deals with auto manufacturers to install its radio devices in millions of new cars, SiriusXM now has 29 million listeners.

Of those, about 24 million pay the $10 to $19 monthly subscription directly; the rest are covered through promotional plans, often paid by automakers.

SiriusXM has also been profitable at a time when other major radio companies like iHeartMedia and Cumulus Media have been struggling.

In 2014, SiriusXM had $4.2 billion in revenue and $1.5 billion in adjusted earnings before interest, taxes, depreciation and amortization. For nearly three years, a majority of the company’s stock has been owned by Liberty Media.

Mr. Stern was crucial to the growth of satellite radio. But with Mr. Stern’s contract expiring at the end of the year, many analysts wondered whether the medium had grown to the point where SiriusXM was no longer dependent on Mr. Stern’s audience. The service has about 175 channels of music, sports, news and talk programming, and over the years has become an influential outlet for promoting new music.

“I don’t think you can pin our growth to one specific thing,” James E. Meyer, SiriusXM’s chief executive, said in an interview. “But I can tell you that having Howard here was certainly a major part of legitimizing this technology and getting this service the notoriety and the recognition that it needed in its early days.”

A survey by Macquarie last year found that 12 percent of SiriusXM subscribers listened to Mr. Stern’s shows, but that they were highly engaged customers who listen frequently, and 5 percent would consider canceling their subscriptions if Mr. Stern left.

Don Buchwald, Mr. Stern’s longtime agent, said in an interview on Tuesday that over the last three years he had met with “probably 30 or 40 companies, from the largest in the world to start-ups,” each of which lobbied him about bringing Mr. Stern aboard.

But Mr. Buchwald said he made his bias clear at each meeting.

“If I could make a deal with SiriusXM,” Mr. Buchwald recalled saying, “I am going to make a deal with SiriusXM.”