You’ve got to give him this, Howard Stern knows how to keep himself in the news.
After keeping his fans in a will he/ won’t he suspense throughout the latter half of 2010 as to whether or not he would re-sign to Sirius Satellite Radio for another five years or simply retire (answer: he re-signed), the famous radio shocker is now suing Sirius for alleged breach of contract concerning stock benefits—and Sirius stock is now dropping due to the suit.
According to The Hollywood Reporter:
“In 2004, Stern was negotiating with both Sirius and XM, two rivals before they merged in 2008. In the lawsuit, Stern says Sirius got the upper hand by promising him that he would be treated like more than just an employee; that he would share in the company’s success.
“Sirius allegedly promised to give Stern stock if the satellite company over-performed its estimates by 2 million subscribers. When Stern signed the deal, Sirius had 700,000 subscribers. The company projected it would have 3.7 million subscribers by the end of 2006, 7.2 million by 2008, and 12.1 million by 2010.
“In reality, Sirius ended up with 6 million subscribers by the end of 2006, nearly 19 million by the end of 2008, and over 20 million by the end of 2010.”
So, yeah. Stern actually helped earn Sirius about 8 million over the mark so, despite the fact that he’s earned hundreds of millions of dollars from hosting his show, if the suit is accurate, it looks like Sirius will have to pony up.
But it may make for an awkward workplace, since Stern is set to work at Sirius for another five years, and the company’s stock is now dropping due to the suit. In another article from the Reporter, Wunderlich Securities analyst Matthew Harrigan “downgraded the stock from “buy” to “hold” and cut his price target from $2 to $1.65, arguing that “Sirius’ current stock market valuation likely cannot accommodate the uncertainty engendered by the suit – even if it ends up being meritless.”
Ouch. This should make for a pleasant work environment.
What do you think of Stern’s suit?