Orbitcast - Karmazin mulls Howard Stern's satellite radio contract renewal

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Howard Stern's contract expires in just about one-year, and the next few months will show some creative bargaining on both sides.

At a 2009 Reuters Media Summit last week, Sirius XM Radio Inc. CEO Mel Karmazin told reporters that the bargaining would begin with Stern complaining that he was doing too many shows, working too hard and not making enough money.

In turn, Management would ask him to do more for less money. But in the end, Karmazin has hopes the result would be a new deal to retain a star he called "a talent like no other in radio."
At the summit, when asked whether Howard Stern or Oprah Winfrey is the tougher negotiator with the satellite radio provider, Karmazin responded: "I'll tell you who was the worst negotiator: It was always Mel because they got all that money from me."

That may not ring well with some shareholders who are looking to the satcaster to reduce content costs.

But Karmazin is well aware of that.

Susie Gharib last week interviewed Karmazin for PBS' Nightly Business Report, where he was asked whether Howard Stern was going renew is his contract with Sirius XM.

"Howard has been a very significant performer for us," Karmazin said during the interview. "He has to decide on whether or not he wants to continue.

"If he does, I would be doing everything I can to work out financial arrangements that are in our shareholders' best interests to do a deal with Howard."

Trying to work out an arrangement is one thing, but can Sirius XM afford it?

"Over my entire career, I've always heard that content is expensive," Karmazin told PBS. "Well, yeah, content is very expensive and if you want to have great content, whether it be the NFL or whether or not it be Howard Stern, you have to pay for it.

"And my business model is always that I'd rather figure out a way to make money with the talent rather than not have them and compete against them."

That's the key right there. If Stern should decide to continue broadcasting and move to another service, the defection would be a damaging - if not fatal - blow to satellite radio.

[via Radio Business Report]








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View the original Article at Orbitcast or discuss it here.
 

semipenguin

Cheeseburger Connoisseur
Oct 11, 2008
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I think Stern has done a lot for satellite radio :)

I think they should either let him stay at a lower rate, or let him go. I'm sure he doesn't want to go back to terrestrial radio :shock:
 

Vargas

Molon Labe!
Oct 16, 2008
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They need to keep him in some capacity for at least another three years.

Three years should be enough to attract enough NON howard related subs so that when his new contract expires, the mass cancellations won't be as bad.

I don't know, I can't see them letting him go.

Howard can't retire though, I think we all know that.
 

Jon

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Dec 16, 2008
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Oh yeah, $500 Million, 4 day work week, 16 weeks of vacation a year, Hamptons traffic, must be a bitch to deal with. Cue the violins. :rolleyes:
 

flap_jackson

Well-Known Member
Nov 10, 2008
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Heck, they're featuring him in their damn ad campaign. I can't see them not renewing his contract if he wants to come back. If he wants to retire, then they're just screwed. But again, I don't see that happening in the near future.
 

IdRatherBeSkiing

Sherbet is NOT and NEVER WILL BE ice cream.
Oct 11, 2008
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Heck, they're featuring him in their damn ad campaign. I can't see them not renewing his contract if he wants to come back. If he wants to retire, then they're just screwed. But again, I don't see that happening in the near future.

Its all negotiating and posturing. Speculations about mass cancellations certainly don't hurt Howards negotiating position. The lack of other offers on the other hand hurts his position.

I think they should resign him but not to nearly the same $$$. He only brought 20% (I am being generous) of his audience with him. While his subscribers are important, they can't break the bank for him either.
 

MAJ Badmotherfarker

is drinking a beer.
Oct 11, 2008
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H100 may be the most listened to channel on Sirius-XM, but they seriously need to start grooming additional talent. They need to renegotiate for significantly less money and use that money to keep people like Ellis and Bubba (and even O&A and Ron and Fez) satellite exclusive. You can't ask people to pay for what they can hear on AM/FM for free.
 

no1hedberg

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Oct 13, 2008
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While his subscribers are important, they can't break the bank for him either.

I think your way wrong about this one. I think they can and will. You take away sports, and Howard Stern, and you have music channels that are mediocre at best, and not nearly worth the cost of a subscription. I know of 4 Sirius and 2 XM subs that are following him out the door....Mine.
 

MAJ Badmotherfarker

is drinking a beer.
Oct 11, 2008
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Washington D.C.
I think your way wrong about this one. I think they can and will. You take away sports, and Howard Stern, and you have music channels that are mediocre at best, and not nearly worth the cost of a subscription. I know of 4 Sirius and 2 XM subs that are following him out the door....Mine.

As technology advances, music is going to become more and more something you just download off the internet. Satellite NEEDS talk radio. The ability to talk freely, outside of FCC constraints is the #1 thing sat rad has going for it.
 

Jon

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Dec 16, 2008
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That's the only reason to HAVE satellite radio is for the talk channels, since the music channels aren't worth anything. As BMF said you can download music off the internet, and you have other means of music discovery that are much easier. Re-sign Howard Stern for 2-3 years at the minimum he'll accept, and groom someone like Ellis to be his heir apparent, and then advertise the shit out of Ellis to get the younger crowd who's attracted to extreme sports lifestyle in, since he fits that demographic perfectly.
 

memebag

Top Brass, ADVP
Oct 11, 2008
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Sirius has Little Steven's Underground Garage. There is nothing like it on terrestrial radio, and I love it. Other than that, Howard Stern is the only reason I pay for radio. I don't see any other reason to ever pay for radio.

My gut feeling is that if Howard leaves, SiriusXM takes a crippling financial hit. They have to sign him to stay in business, and he knows it. He'll ask for and get whatever he wants.
 

flap_jackson

Well-Known Member
Nov 10, 2008
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Hey, Jason Ellis can take over 100 with Ferrel to create Ferrellis. Go away Howard:bigthumbup:
 

Argji

Member
Oct 14, 2008
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I guess that I'm in the minority - the only reason I have 2 satellite subs is for the music. No
offense to Howard, Opie & the other guy, etc. but I couldn't care if they are on the service or
not. Obviously they do help pay the bills though in number of subs I suppose, so having them on
is a good thing. I try to get into ESPN radio, but sports talk doesn't really do anything for me either.

We could get into the mobile internet vs satellite debate for music, but that has been beaten
to death in other threads. Satellite is the easiest way for me to listen to music that cannot be
found on local Terristrial, along with ease of use. Heck, I've been testing out my new Skydock
without activating the XM service by only listening to my MP3's and I'm already sick of them!

Anyway, I know it is not the most popular opinion in this thread, but just wanted to get out
there that there is another viewpoint for some subscribers.
 

limegrass69

Confused
Oct 12, 2008
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New York
All this talk is nothing but a negotiation at this point.
I'm not reading too much into it.

I also don't think Howard has it in him to go back to terrestrial radio again. Plus, I don't think that the radio companies have the money to pay him what he wants.
 

memebag

Top Brass, ADVP
Oct 11, 2008
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Lake Huntzing
Howard ranted about Mel's comments today. His take was "screw negotiating, I'm done after this contract is up." Which sounds like exactly what Mel said he would say.