Monday, January 27, 2014

Analyst: Howard Stern No Longer SiriusXM's 800 Pound Gorilla

Howard Stern
While Howard Stern was a big draw for SiriusXM in 2004 when he agreed to join the satellite radio service, “the sub base is now at 25M and there’s less necessity to strike a deal when his contract comes up for renewal at the end of 2015,” an analyst for Macquarie Equities Research writes. According to deadline.com, Amy Young bases that conclusion on a survey of 800 SiriusXM customers.

It found that 12% listen to Stern, and 30% of this group tune in less than twice a week. More to the point, just 5% of all subs “would consider leaving Sirius XM if he were no longer available.”

In addition, 96% say that they aren’t willing to pay extra to have him in the lineup. That indicates that Stern “could have less leverage in the next contract negotiations.”

Young says that he took a 20% pay cut in 2010 with a contract that paid $80M a year, and estimates that it could drop another 13% to $70M a year in 2015.

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Tom's Take:  Posturing for contract negotiations has begun. 

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