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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