Howard Stern What does Howard Stern have in common with Mary Hart and Susan Lucci? Pay cuts.

The self-styled King of All Media is getting attention for his salary squabble with his employer Sirius XM Radio (SIRI), which was resolved today. Stern, who groused about maybe having to take a cut, signed a five-year deal. His earlier agreement with the satellite radio provider was reportedly worth $500 million.

Terms of this deal, which he announced this morning on his radio show, weren't released. It wasn't clear whether they were as generous. Officials from New York-based Sirius and Stern's agent Don Buchwald didn't respond to email requests for comment.

A Stock That's in Orbit


"On my first day in satellite radio Sirius had approximately 600,000 subscribers. Today, the two companies [the combined Sirius and XM] have 20 million; and, in my view, we have just scratched the surface of how many people will get on board," Stern says in a press release.

News about the Stern agreement helped boost Sirius's shares, which have soared more than 133% this year. His contract status came into question after Sirius Chief Financial Officer David Frear hinted that the shock jock was entertaining other offers and that the company might try to get more favorable long-term contracts. Stern responded that there was no (explicative) way that he would take a pay cut. He later apologized to Frear when he realized the exec's remark was not about him specifically.

"Howard Stern remains a major attraction in broadcasting," says Michael Harrison, publisher of Talkers magazine, in an interview before the announcement. "It's understandable why Sirius would be tough with him. . . . Many people are taking salary cuts. The problems facing the broadcast industry are not imaginary."

Getting Tough on Stars' Salaries

Mary Hart supposedly took a 50% less pay in the final year of her contract, though her publicist refutes that. There were even rumors that CBS (CBS) would slice Katie Couric's compensation. The network denied those claims. And earlier this year, both CBS and Walt Disney's (DIS) ABC News had major layoffs.

"Network and studio executives tell TV Guide Magazine they've adopted a get-tough policy on salaries for stars of the new fall shows," TV Guide reported earlier this year. "While the salary for a lead has been $150,000 to $200,000 per episode in recent years, most deals for stars of new series were between $75,000 and $125,000."

Soap-opera actors have seen their pay cut after their shows' ratings never recovered from the disruption caused by the 1995 trial of O.J. Simpson. Even soap queen Susan Lucci, a star of ABC's All My Children, reportedly has taken a financial hit. Local TV news is also suffering, resulting in many veteran TV anchors quitting rather than take huge salary cuts.

Stern would most likely have been a success no matter if he stayed in satellite radio or if he decided to provide his show via the Apple (AAPL) App Store, as had been rumored. That option may have been tempting, given that Juniper Research claims mobile app downloads will hit 25 billion by 2015, according to Computer World. However, such a venture may have required Stern to invest his own money. And he would have faced the same dilemma if he chose to move his operations entirely online.

It's understandable that Stern would take the least-risky option because at this point in his career, why take a big financial gamble?

"Stern often plays the role of a victim," Harrison says. "The truth is he's one of the most blessed individuals in our industry."


Increase your money and finance knowledge from home

Behavioral Finance

Why do investors make the decisions that they do?

View Course »

Bonds for Beginners

Learn about fixed income investments.

View Course »

Add a Comment

*0 / 3000 Character Maximum

27 Comments

Filter by:
rcdutchman

Howard And Robin Are Two Complete Morons That Won't Even Take An IQ Test Because They Both Know Theu Are Complete Morons And Don't Have Any Talent What So Ever. God Bless All The Stupid People That Still Listen To Those Two Jerks.

December 10 2010 at 6:07 AM Report abuse +1 rate up rate down Reply
ccfpinc

I listen strictly to the music,50,60,70,80 90 whatever. I listened to Stern once on Commercial radio. Once was more then enough. But I never knock a person that can legally make the big bucks. He is deffinitely doing that. Wish he was a client of mine. Hope he is smart enough to avoid the Bernie type advisors. Kind of sad to see so many get ripped off by the Ponzi schemers. Old sayings are true "If it sounds to good to be true then it isn't"

December 10 2010 at 4:57 AM Report abuse rate up rate down Reply
ajallenky

Sirius will become resigned to a very small segment of the population that LIVES in their car ( Traveling salemen, etc. ) - not mainstream America where one can get commercial radio for FREE - their stock has been a @ about $1.00 forever and they are lucky they haven't gone belly up having to pay that New York transplant $49,999,999. more than he is worth !!!

December 10 2010 at 4:45 AM Report abuse +1 rate up rate down Reply
superduperh8r

Hell YES! Way to go Howard!!! I love you. 5 more years is golden!!!!!!!!!! I will continue to laugh for 5 more years listening to you and the crew.... GOD BLESS YOU.

December 10 2010 at 1:12 AM Report abuse -3 rate up rate down Reply
tater4771

howard stern is just like all overpaid sports figures that cry when they don't get there millions. who needs him?

December 10 2010 at 12:27 AM Report abuse +5 rate up rate down Reply
mbmmmb08

He is no different than any other Hollywood entertainer....he and all of them are going to hell.

December 10 2010 at 12:18 AM Report abuse +2 rate up rate down Reply
joe

I don't know what I would do without Howard. No one can entertain like he does. Thanks Howard.

December 09 2010 at 11:00 PM Report abuse -4 rate up rate down Reply
RED STAR

Lord Howard Stern! I pray to you every day my heavenly father Howard Stern, thank you for blessing me by resigning my lord Howard...Thank you for being my true God, I thank you in your name Howard Stern...Amen!

December 09 2010 at 10:00 PM Report abuse -5 rate up rate down Reply
2 replies to RED STAR's comment
mbmmmb08

Penis envy you are RED STAR

December 10 2010 at 12:19 AM Report abuse -1 rate up rate down Reply
tater4771

you have some major issues..seek help asap.

December 10 2010 at 12:22 AM Report abuse +2 rate up rate down Reply
avianmayhem

Why on earth would you pay for radio in the first place? Granted commercial radio is no great shakes, but it's free at least, or you could plug in your MP3 player or use your CD player. People spend way too much money on gadgets and the subscriptions to maintain them, and then wonder why they have trouble with the rent check every month.

December 09 2010 at 8:55 PM Report abuse +6 rate up rate down Reply
bobsellsaz

I don't listen to this person. I think the reason there are so many listeners is because commercial radio is so bad, not because one person is so good.

December 09 2010 at 8:27 PM Report abuse +5 rate up rate down Reply