Howard Stern's Future on Satellite Radio

Remember in 2006 when Howard Stern was so thrilled at his new home on Sirius satellite radio? Remember how he was saying how much he had hated working at broadcast radio and now that he was on Sirius it was a breath of fresh air, how for the first time a broadcast outlet was being run by management who respected the talent? Well how times fly.

It is 2010 and with one last year before his contract runs out Howard is talking trash about Sirius. Something the management did to him behind the scenes that he would rather not talk about on the radio. Basically he is now saying that he is no longer happy and is ready to retire. If this all sounds familiar to you then it is because he has been threatening to retire from radio for most of his career. This always happened the final year of his contract. The same song and dance he would perform most likely to force management to give him a better deal on the next contract. Management had their own dance. They would refuse to negotiate a new contract suggesting that once the old one expired that Howard would be out a job. Their message was "We don't really need you."

Inevitably a new five-year contract would be signed, and Howard would announce that he was happy to be working for Infinity radio for another half decade. In 2005 Infinity blew it. They waited longer than usual to negotiate a new contract with Howard, possibly because they were contemplating firing him at any moment. It was not long after the Janet Jackson Super Bowl incident and the FCC was going overboard to clean up content in radio. Worse, Howard Stern had campaigned against George W Bush and now Sirius was expecting some sort of payback. All it would take is one controversial broadcast of the Howard Stern Show and radio licences could be pulled. Instead of discussing a contract renewal Infinity asked Howard to sign a paper stating that they had the right to immediately fire him if he was sited by the FCC again regardless if he was guilty of the infraction or not. Meanwhile both XM and Sirius were offering Howard millions to jump ship and join satellite radio. With increased censorship, little respect, and no contract renewal offers Howard took the multimillion dollar deal from Sirius, a gamble because should Sirius have gone bankrupt then he would not have seen a dime. And in those early days both XM and Sirius were both on the edge of bankruptcy.

The final months at Infinity Radio were not at all fun for Howard. Over at Sirius his promised channels, Howard 100 & 101, were already broadcasting, mostly fan shows and events like the craptacular. Back on broadcast radio Howard was forbidden to mention Satellite or Sirius. Stations Howard syndicated his show to worried that he would bring his listeners over to satellite. Some of them cancelled his show months before it was scheduled to go off the air despite record high ratings, hoping that his listeners would forget about him by the time his show made the move to Satellite. Infinity informed Howard that they were retaining the copyrights to all of his shows not allowing him to repeat any of his classic bits at Sirius. When Howard finally left Infinity filed a lawsuit claiming he had used CBS airwaves to illegally promote a competing medium. The lawsuit was eventually settled out of court with Howard agreeing to pay infinity an unknown sum and in return Infinity giving Howard the rights to re-air his old radio shows.

Howard seemed thrilled to work at Sirius. Nearly every show he did the first year had him and the rest of his crew praising the Satellite radio station they worked for. So is it possible that in only four years Sirius has changed into something Howard despises? Possibly. But given Howard's track record it is also very likely that his complaints and threats of retirement are just a negotiating tactic. However, I am still haunted by a statement Howard made the day he left Infinity. Still not legally allowed to broadcast over Sirius airwaves he was able to do a show for the Internet broadcast over Yahoo! Here Yahoo! not only covered his final day rally but then followed him on a bus tour through the streets of Manhattan to the Hard Rock Cafe where he put on yet another live show. Prior to the show he had an impromptu press conference. It was there that he first mentioned MTV. "Satellite radio is exciting, it is like MTV was when it first began." Whoops. I remember MTV when it first began. It was suppose to be a 24 hour music video channel. Then only four years into the channels history management began firing the original VJs and introducing programming that had nothing to do with music, shows like "House of Style" and "The Real World". It did not take long for MTV to abandon their 24 hour music channel format even though it had been very successful. I would not bring up MTV when talking about Satellite. It only reminds people that cable television was once exciting and innovative and now it is pretty much copying network television to the point where original cable shows have been cancelled and replaced with reruns of network shows.

In 2006 Sirius was making a name for itself by becoming the home for quality radio. Personalities like Howard Stern could broadcast their shows uncensored. Hundreds of music channels with DJs who could play any song they wanted. No more of the same five record play list that every broadcast station had. No longer the same old top 40 format on every channel but hundreds of other formats. Sirius had hundreds of channels and since it was subscription based then they had no reason to seek higher ratings with bland pop music programming. But there was always the possibility this would not last for long. Satellite radio's best bet was to attract listeners who felt disenfranchised by mainstream radio. But once satellite became mainstream and everyone owned one then what would be the incentive to continue that sort of broadcast. The reason why radio has sounded so bad for the past few decades is because it is programmed the way the advertisers want it to be. Advertisers have their own ideas as to what sort of programming draws the most young white listeners, a demographic they prefer because of the assumption that young white people are the best consumers. Sirius has accepted some advertisers on some of their stations. More could follow once satellite becomes more mainstream. And once Sirius begins making money through advertisements then the incentive would be to maximize the ratings on those channels. This would inevitably involve shutting down most of the other channels so there is less internal competition. Less channels mean more ratings on the individual channels. Since subscribers are locked in there would be no incentive to continue spending millions to hire high profile celebrities like Martha Stewart, Oprah Winfrey or Howard Stern to start their ow channels. Advertisers could also bring censorship. If Pepsi Cola was to advertise on Sirius they would feel a lot better about it if Howard Stern was less controversial. believe it or not it was not the FCC who kept radio tame for so long but sponsors demanding clean content. They would rather that their products not be boycotted because they sponsored something controversial.

Howard has already done what Sirius needed him to do. He brought over six million listeners from broadcast radio. That is anywhere from $800 million to $1,600 million a year in subscriptions ( depending on how many radios each subscriber has. many of Howard's listeners subscribe to two radios, one for home and one in the car. ). Even after it's merger with XM, Sirius came close to bankruptcy. Even with the millions of subscriptions that celebrities like Howard were creating satellite radio was barely making enough money to cover it's expensive broadcast costs. With sales of cars hurt by the recession satellite radio lost one of it's major sales outlets. This year saw Sirius drastically cutting costs, one which may have included asking Howard to take a steep cut in his salary. Sirius had needed Howard to bring in millions of subscribers. Now that Sirius has those subscribers they can risk dumping Howard, gambling that most of them are so addicted to satellite radio that they would not cancel their subscriptions.

Let's say that Howard leaves Sirius or that Sirius decided not to renew his contract. Then what? Because the FCC allowed XM to merge with Sirius, Howard has no competition to go to. This would leave broadcast radio, but Howard has already sworn he would never return. That does not necessarily mean that he would never find a reason to return to broadcast radio, just that it is not very likely. Then again what will most likely determine if Howard returns to the terrestrial airwaves is his personal finances. A lot of his Sirius payment was tied up in Sirius stock, which would no doubt plummet the second it is announced that Howard is leaving. Out of the regular money payments a lot seems to have been spent in the past five years. From a production company that created cartoons and sitcoms that networks ultimately did not air, to an expensive mansion built in the Hampton's, to his renovated Manhattan apartment. And along the way were expensive gifts, airline trips across country and down to the pleasure islands, resorts, gambling and several other expenses usually attributed to the rich. In other words, has Howard Stern MC Hammered his money away? If so then he may need to return to terrestrial radio whether he wants to or not.