Stern Show What Stern's Deal Means To SiriusXM - Motley Fool Knob-Slobbering Him Again

Discussion in 'The Howard Stern Show' started by OV, Dec 23, 2015.

  1. OV

    OV Rapscallion

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    I thought MF had more integrity than to keep pimping Buchwald spin as fact.

    Here are some laughable excerpts from Daniel Kline's latest fanciful puff piece:

    (*...*) are my comments

    http://www.fool.com/investing/general/2015/12/20/what-howard-sterns-new-deal-means-to-siriusxm.aspx

    The radio personality has signed on for five more years and an expanded presence in video. This will keep listeners with Sirius XM.

    The self-proclaimed King of All Media, Howard Stern, has saved Sirius XM (NASDAQ:SIRI) for a second time by agreeing to keep his radio show on the service for another five years.

    His decision,(*to initially come to Sirius*) shocking as it was, pretty much immediately turned things around for Sirius. The company quickly began adding subscribers and when market conditions forced the two companies to merger, it was Sirius as the company that ended up controlling what became Sirius XM (though eventually Liberty Media ended up owning a controlling interest). ( *incidentally without whom, Howard, the partner who didn't invest in himself when the company's penny stock was on the verge of being Dlisted, would have been out in the cold *)

    Stern is one a the very short list of personalities who has proven that his audience will not only follow him, but will pay to hear his show. His leaving may not have immediately put Sirius out of business, but it would have caused a significant drop in subscribers -- especially if Stern went to another pay service.

    In this case, with his contract being up at the end of 2015, the radio host was mostly quiet. He talked about retiring, though it was clear he wasn't going to do that. He also spoke about having two dream offers -- many guessed that Time Warner's (NYSE:TWX) HBO, which has snapped up Bill Simmons and Jon Stewart, might be one of them -- but it seemed like staying was hist first choice.

    That's statement is Stern being Stern, but the deal is significant because it's akin to a lifetime commitment from the 61-year-old broadcaster.

    Why does this matter?
    Sirius XM faces serious competition from the Internet. At one point its curated music channels were a draw but streaming services have made that irrelevant. In addition, the company could once rely on its slate of talk shows as a differentiator. Now, the wealth of top hosts with free podcasts makes that advantage much smaller.

    Stern, however, has a dedicated audience willing to pay for his show. The satellite company does not release listener numbers or ratings, but he's clearly a draw. Various surveys affirm and dispute exactly how important Stern is to the satellite service, but if he left, it's fair to say many people would at least consider not renewing their subscriptions.

    One often-cited survey of 800 Sirius XM customers done by Macquarie Equities Research found that 12% of Sirius XM subscribers listened to Stern and 5% would leave if he left. Those numbers feel low (and the controversial nature of his program may cause some people to downplay their fandom), but even at 5%, the loss would be significant.

    The satellite company currently has 29 million paying customers who pay about $14.99 a month. Losing 5% of that would be a drop of 1.45 million subscribers or $21.73 million a month. That's $260 million a year -- not a death blow for the service, but a problem. (*of course that's unless he was replaced with a younger, more demographic-friendly and relevant personality*)

    It's bigger than that
    In reality though, the bigger issue Sirius XM faced had Stern left was not the immediate diehards who would follow him to HBO, a podcast, or wherever else he might go. The problem would be in the overall devaluation of its service.

    With music no longer being a calling card and fewer talk personalities not being a driver, Stern's presence likely tips the scales for many on-the-fence customers. Had he left, it would have started the type of slow bleed that does not kill you quickly, but does kill you.

    That issue would have been exacerbated if Stern had left for HBO. If his show had become an audio and video offering on that company's streaming services, then many Stern fans would be faced with shelling out money to follow their hero. If they had to do that, then many of them would almost certainly look at whether Sirius XM was still worth $14.99 a month.

    This new deal gives Sirius XM time. The company has made itself less Stern-dependent and in five years, perhaps his loss or retirement won't be a big blow. For now, though, this is a big deal for the satellite company, which keeps its signature host on-board, where it can leverage his devoted audience to launch a video product.
     
  2. Getthepoisonout

    Getthepoisonout I regret my username

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    Where is the emojo of a guy burying is head in is hands. We need that one now.
     
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  3. Getthepoisonout

    Getthepoisonout I regret my username

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    nevermind, finally found it.
    :facepalm:
     
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  4. Dlist

    Dlist Well-Known Member VIP

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    Based on these numbers, they can't be paying him $90M/yr. It doesn't make sense if they only stand to lose $21M/yr if he left.
     
    Last edited: Dec 23, 2015
  5. Captain

    Captain Alto, Blanco y Guapo Gold

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    SIRIUS has traded between 3 and 5 bucks since time began. It is basically a place-holder for intellectual property/patents, not content. When all cars are finally multi-platform, SIRIUS will sink into pink sheet territory since the rental/new car market is propping up a 1990s product in 2015. At this point, the big stakeholders have gotten their money, so the fact that Howie is paid $$$ or $$$-plus doesn't matter to them one bit. Those foolish enough to buy that shit stock can watch their 3 to 5 dollar stock sink faster than Beth-O's integrity.

    I mean, take a look at the "bump" that the stock got from Howard re-signing. The market could not have fucking cared less. Ass-hat.
     
  6. Whores&Headlocks

    Whores&Headlocks Well-Known Member

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    The article says SXM would lose $260 million a year, so its a $170 million difference.
    I am not agreeing with any nmbers, but I don't see where your math fits.
     
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  7. Snotty

    Snotty My Snothand be strong!!! VIP Gold

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    I bailed at "Saved SXM a second time"......
     
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  8. Sickboy

    Sickboy Latverian Monarch

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    That company is run by idiots.
     
  9. Dlist

    Dlist Well-Known Member VIP

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    Oh yes, it is $21M/MONTH not year. Oops! :) :facepalm:
     
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