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by Answer Rabbit on April 10th, 2006

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Why did Sirius pay Howard Stern so much to move to satellite radio? Will they really make that up in ads?

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  • by Persky Bunkermeister on April 10th, 2006

    Persky Bunkermeister

    They wanted a huge media star to hype their product. Yes it was worth it. Howard's compensation is tied to company performance, he was recently awarded $200 million in Sirius stock because he achieved the goals set out for him. Read the whole story here:
    http://www.kusi.com/business/2385931.html

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  • by ptrask on April 19th, 2006

    ptrask

    Is Howard Stern worth $500 Million over a five year period? Let's break it down. When Howard signed on with Sirius in 2005, Sirius' current subscriber base was 600,000. As of March 31, 2006, Sirius' subscriber base was 4,000,000. That is a net increase of 3.4 Million subscribers. Even if you only credit Howard with 1/2 of the new subscribers, (which is an EXTREMELY conservative estimate...I would guess he is responsible for most, if not all of the new subscribers) that would mean he is responsible for bringing Sirius 1,700,000 new subscribers. Let's now do the math. $16.95 times 1,700,000 is $28,815,000 per month. That works out to almost $350 Million per year.

    Keep in mind, that if we stick with these conservative figures, and assume that there will be no additional subscribers due to Howard, Sirius will gross over 1.7 BILLION dollars in the next five years as a direct result of the Howard Stern Show. I personally feel that this number is understating the potential gross significantly, and that the real number may be in the 20 to 50 billion dollar range. (Not even taking into consideration the advertising revenues that Howard will generate.) Howard's compensation of $500,000,000 works out to less than 1/3 of the gross. Howards presence has also brought Sirius from the second-fiddle position behind XM to the market leader in less than 9 months. Not a bad deal for Sirius.

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