Howard Stern, the self-described "king of all media," will continue his reign with Sirius XM Radio Inc.
Ending speculation that he would take his show to the next frontier — whatever that might be — the radio personality said on his morning show Thursday that he had signed a new deal that would keep him with satellite radio broadcaster Sirius XM for five more years.
Stern, who turns 57 next month, did not reveal details of the pact, but word that he was staying put was enough for investors to drive up Sirius XM stock about 20% in early-morning trading.
Stern joined Sirius XM in 2006 in a five-year deal valued at $100 million annually. That price tag was for the show, meaning that it also covered costs of Stern's morning program and salaries for his team. Still, Stern himself was probably taking home more than $40 million a year, people familiar with the situation say. Over time, Stern has cut back his workload. He now does his show four days a week, and some analysts say that he may cut back to three days under this new deal.
With almost 20 million subscribers, Sirius XM has grown tremendously since Stern made the jump from FM radio. At that point, the company had about 600,000 subscribers. Of course, much of that growth came from the merger between Sirius and XM. Still, Stern has a rabid following and about 1 million faithful listeners, a person with knowledge of the show said.
"Howard forever changed radio and was instrumental in putting Sirius on the map when he first launched on satellite radio. He is one of the few 'one-name' entertainers in the country, and our 20 million subscribers are lucky to have him," said Sirius Chief Executive Mel Karmazin.
The challenge for Sirius XM was keeping Stern without breaking the bank. The company, which was on the verge of bankruptcy just a few years ago until cable pioneer John Malone's Liberty Media Corp. made a huge investment in it, has wanted to trim programming costs.
At the same time, Stern provides a huge promotional platform for the service and signing him was groundbreaking for the company, helping it to recruit other big talent.
There was speculation about Stern going elsewhere, but it would have been tough for him to get the kind of money Sirius was going to pay. Although Stern has the clout to launch his own Internet radio operation, it would have been costly and there would be technological challenges to reaching his core audience of morning commuters.
A return to broadcast radio also was unlikely. Among the reasons Stern left FM was the Federal Communications Commission's scrutiny and fines. On Sirius XM, he gets to say what he wants.