If you’ve ever listened to Howard Stern’s show on SiriusXM and said to yourself, “Gee, I know Howard is making about $90 million a year, but man, I think he’s underpaid,” some other people agree: his bosses. Bloomberg.com reported today that SiriusXM Holdings Inc. is working on a contract that would give Stern a $2.5 million raise per month, increasing his salary to about $120 million a year.
Where did Stern’s bargaining power come from, you ask? “Fear Factor.” Literally and figuratively. Joe Rogan, the former host of “Fear Factor” on NBC and now the king of the podcasting world, recently signed with Spotify for nine figures, and there was fear and speculation that Stern had that same kind of leverage and might do the same thing. He could leave satellite radio just like he departed terrestrial radio in 2005, creating a vacuum in each medium he departed. In order to prevent that from happening, SiriusXM would need to block him from leaving with stacks and stacks of cash. Which is what it sounds like they are trying to do.
Stern typically signs five-year contracts, so if this new deal is that length, he will be 71 years old when it ends. Sirius shares climbed to $5.95, about a 7% increase once Bloomberg first reported the news. Even at the age of 66, Stern still moves the needle, and nobody appears to know that more than Sirius CEO Jim Meyer, who has long considered Stern the key to the company’s success.
“I can tell you that we understand the economics very, very well, for instance, of content like Howard Stern,” Meyer said at a Goldman Sachs conference. ”I can look every investor in the eye and tell them that is a good investment for SiriusXM.”