Sirius XM CEO Making a Howard Stern Backup Plan
Mel Karmazin says still "no deal" signed to keep the shock jock on satellite radio
NEW YORK - Sirius XM Radio CEO Mel Karmazin told Bloomberg that his team would look at adding new types of content and personalities or beefing up existing areas, such as classical music offerings, if his company can't reach a contract extension with talk show host Howard Stern.
"There's no deal," Karmazin told Bloomberg. "The only announcement will be when there is a deal, or there's not a deal. And I'm hopeful there will be a deal."
Stern's five-year, $500 million contract expires at the end of this year, and Karmazin previously said he expects to provide an update on the contract situation by the company's third-quarter earnings conference call next month.
"You don’t try to replace Howard," Karmazin told Bloomberg about his strategy in case Stern doesn't strike what analysts expect would be a shorter new contract with lower earnings. "I don't think there’s a radio personality that's out there that we would bring in and say to the Howard Stern fans 'let us introduce you to this new talent'."
Instead, Karmazin said he would use the savings to get "different people who might appeal to different audiences." Sirius could also "expand our classical music, or maybe we would do a little more in the opera area, or maybe we would do something that we’re not doing today,” he added.
Stern is responsible for adding about 2 million subscribers to Sirius XM since he moved to satellite radio in Jan. 2006, Bloomberg cited Standard & Poor's analyst Tuna Amobi as saying. Sirius recently said its subscribers will surpass 20 million before the end of the year.
Karmazin declined to give Bloomberg an estimate of how many subscribers may cancel the service if Stern leaves. But Sirius would save $100 million a year and use that money to fill programming gaps, the CEO said.