BuzzMachine

The media pundit's pundit. Written by NYC insider Jeff Jarvis, BuzzMachine covers news, media, journalism, and politics.

The Daily Stern

13 comments on The Daily Stern

The Daily Stern

: THE BOSS: Viacom chief and long-time Howard booster Mel Karmazin defends Stern to the Wall Street Journal:

“You know, I think he has been a target,” Karmazin continued. “If you think about what happened, it was that Janet Jackson happened. I get subpoenaed. They now talk about radio as well as that. Another company canceled Howard’s show for no reason other than that they were going to Washington to testify and just didn’t seem to have the courage to stand up for programming that they aired. And we absolutely stand up for what Howard is doing.”

: SATELLITE ECONOMICS: The LA Times comes a bit late to the Stern-impact-on-satellite story and finds an XM exec negotiating in public, poormouthing about how they can’t afford Stern:

Hugh Panero, XM Satellite’s chief executive, pooh-poohed the possibility, saying he doubted whether XM or Sirius could afford the reported $20 million Stern pulls down a year through his contract with Viacom Inc.’s Infinity Broadcasting.

They might be able to come up with that kind of dough soon, though: XM’s and Sirius’ stocks are trading near 52-week highs as the number of subscribers and satellite-capable radios keeps increasing.

Don’t believe the XM guy; he has an audience of one — Stern’s agent — in mind.

Let’s look at the numbers:

I saw a number recently that said that Stern brings in $100 million in radio.

If he went to satellite, let’s say he took a quarter of his 8-million-plus listeners with him.

So let’s say that 2 million new subscribers come in — doubling the current total satellite radio customer base — and that they each pay $10 per month (more for Sirius). That would be $240 million per year. And they would have produced that growth without marketing and subscriber-acquisition costs; Stern will have done that for them.

So even if you cut that in half and it’s still more than Stern reportedly produces now.

And it builds the industry. The impact on the stock would be monumental.

And that means that the satellite company could pay Stern in great measure in stock and options.

Oh, they can afford him… if they can build radios fast enough (which, Stern says, is an issue).

The numbers surprised me. His impact could be huge.

Meanwhile, see the AdAge story I quoted yesterday: Broadcast radio will get safer and older and smaller. Satellite will then grow even bigger. And the stock will rise more.

I’m not selling my Sirius stock yet.

MediaDrop‘s Tom (and my colleague Peter Hauck) wonder about whether Stern could also offer his show to both satellite companies. That could work, though then neither would have an exclusive edge and neither would give him equity.

: MORE ON THE BANDWAGON: Sun-Times columnist and movie critic Richard Roeper comes out for Stern and against the FCC.

: FAME: Choire Sicha is doing radio interview on Stern. OK, I’m jealous.

[Confidential to producers: I’m available for opinions and sound bites.]

: ATTORNEY TO THE STARS: HowardStern.com is linking to Ernie Miller‘s great pieces on the FCC’s insane decisions.

: THE RIGHT TO READ: I had an email conversation with Ernie asking about the rights of the audience in all this and what standing we have in the cases that are sure to follow:

> Do we have a right to listen (which Ernie said is called the “right to read” in legal discussion): That is, can we argue that our First Amendment rights have been violated if the FCC successfully stifles political speech (no matter how it gets there)?

> Do we have a right to a spokesman? If a person speaks for us and he is silenced, does that violate our rights and give us standing?

> Do we have a right to be free of the fear that the government will fine us if we say something that, under its vague regulation, is deemed indecent or profane while we are, say, being interviewed by a radio reporter or yelling something at a broadcast concert or sporting event or calling into a talk-radio show?

It’s doubtful that we could file suit against the FCC but we can file friend-of-the-court briefs once suits are filed. And as Ernie said, free speech is a matter of distribution: There’s a sender and a receiver and when the rights of one are affected, so are the rights of the other.

: PREVIOUS DAILY STERN POSTS: here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here.

13 responses to “The Daily Stern”

  1. Reid Avatar
    Reid

    And how do you resolve those first two items, Jeff? Howard’s boss is doing the Full Monty Stand Up for him. Howard’s boss has him under contract for two more years, too.
    Yet it’s clear Howard (and you) expect him to move to satellite. You’ve already got the economics worked out. You think this is public negotiations. I recall you’ve even suggested some possible ploys Howard might use to breach his existing contract, should it remain the only pesky restraint. But you’ve never talked about the connection between Howard’s seemingly continual threats to quit, and his desire to move to satellite. It simply doesn’t seem possible to you that much of this ruckus is self-manufactured to facilitate Howard’s move. It’s about free speech. In a medium that has never ever had such a thing.
    But when you put those two items right next to each other in your blog, even work out the bottom line, it’s pretty hard not to make the connection. And if that’s what Howard wants to do (and you clearly want him to as well), more power to him. He could grow that industry, have a big impact, etc., etc., etc.
    Just be honest about it, and don’t try to manipulate us. It is unseemly to paint this as strictly about a non-existent right free speech on the radio, when it’s clear as day to me (right down to your projected bottom line), this is about a desire to go to satellite. And has been since the second paragraph of Day One.

  2. Jeff Jarvis Avatar
    Jeff Jarvis

    Reid:
    I’ve said all this before: Stern does not want to leave broadcast — though he is sick of the hassle — but he won’t (and shouldn’t have to) face personal liability that could reach millions upon millions of dollars. CBS/Viacom says they will defend him — though they also said have a zero tolerance policy in re FCC fines and they’d have to square that — but they can’t indemnify him for amounts that large; shareholders would scream. As I’ve said before, I suspect Stern has some creative control clause in his contract that will let him out. But as I’ve said before, he does not want to leave; if he leaves, both he and Viacom will lose big money; Howard is an entertainer who craves the largest possible audience and he will absolutely shrink his public on satellite. But if he does leave, he has been quite clear that he would move to satellite. When I saw the quote from the XM guy — engaging in public negotiation — I started working out the numbers and was surprised to see what it could mean. So take off your tinfoil Stetson, my friend; no conspiracies here. Go back to watching the hearings….

  3. sol Avatar
    sol

    Howard Stern = ignorant, filthy, dishonest, creep.
    Oh, and he’s for Kerry.

  4. Trump Avatar
    Trump

    but he won’t (and shouldn’t have to) face personal liability that could reach millions upon millions of dollars.
    Disagree. His political and anti-religious hate speech has no place in our society, and if crippling personal fines will teach him a lesson, so much the better

  5. Mike Avatar
    Mike

    Trump, you have to lay off the anti-religious and political hate speech commentary! Let me ask you this, are you for the speech codes that are now coming under fire at most of the universities in America? Because those speech codes are used against conservatives to shout them down as bigots and etc. because people don’t agree with what they are saying! Its unfortunate what Howard is saying about Bush and the religious right, but you have already stated the solution to that problem, you turned him off. There you go, no more perceived hate speech. It’s not your problem if other weak-minded individuals buy into what Howard is saying.

  6. Reid Avatar
    Reid

    “But as I’ve said before, he does not want to leave…”
    Is that why he’s rallied his millions of “listerners” to rise up in his defense, by demanding they contact their elected representatives on his behalf? Is that why he has organized and appeared at protest rallies to defend our natural born right to free speech on morning radio shows? Oh, that’s right, he hasn’t done those things. There was one rally out west, but Howard didn’t organize it or appear at it. Nothing in the natural place for it, Manhattan.
    Here’s man with lots of power, and the ability to bring millions of fans to his cause, who will gladly do what he asks of them. So what does he do with it?
    Nothing. Nada. Just talk a lot about quitting. Whine about how they’re all out to get him. And, oh yeah, “can they make enough receivers?”
    Howard can do whatever he wants. He has that power. And what he wants is crystal clear to me.
    “if he leaves, both he and Viacom will lose big money”
    As for Infinity, you’re right, and that’s why Mel mentions Howard’s remaining two years under contract every time he opens his mouth. As for Howard, you’ve already predicted a potential quarter billion in annual income, and “even if you cut that in half … it’s still more than Stern reportedly produces now.”
    So which is it? He’ll lose money, or produce more fees for his employer than he does today, even with a quarter (an eighth, if you “cut that in half“) of his current audience?
    “So take off your tinfoil Stetson, my friend; no conspiracies here. Go back to watching the hearings…”
    They don’t resume until April 18. And if my comment makes me deserving of a “tinfoil Stetson,” then your belief our government is suddenly engaging in intentional Talibanism against Howard should earn you a Ten Gallon Aluminum Hat as well.
    To me, it’s about actions and words. You’ve already said it, and acted on it. You bought the satellite stock you mentioned on Day One of the Daily Stern. Because you know that’s where Howard has been headed from Day One.

  7. Trump Avatar
    Trump

    Mike-
    I agree with what you’re saying, but screw Stern now. He himself turned me from someone who was content to not voice my opinion on this issue to my Senators and the FCC, to someone who now happily exercises his democratic rights and voices his displeasure with Stern to the proper channels.
    He wants to exercise HIS free speech? Well, now I’ll exercise mine. Lets see who wins…

  8. Anon Avatar
    Anon

    Stern is not going to satellite – no way, no how. Unless he takes a huge pay cut and works out some kind of a bonus deal for new subscribers, they cannot pay what he wants.
    The satellite radio business model is in its infancy and entirely unproven – remember it is competing against a mature, highly proven advertising based model that is “free” for the user. Currently, satellite requires that consumers not only purchase a relatively expensive converter and or radio to use, but they must also pay a monthly subscription fee to access it. Both XM and Sirius have a long way to go even approach the numbers of a single local station in a top ten market – let alone approach nationally syndicated shows numbers. It is somewhat analogous to the cable TV world of 30 years ago

  9. pb Avatar
    pb

    Wow, a lot of drivel here.
    Reid, of course there’s free speech on radio. Maybe not absolute but there really isn’t absolute free speech anywhere.
    Reid, it’s in Mel’s interest to defend Stern even if he thinks he will go so that he has maximum leverage in any contractual dispute.
    Sol, only someone who doesn’t listen to Stern could make that statement.
    Trump, his political and anti-religious speech is incredibly refreshing in this day an age where the religious right and supposedly conservative Republicans want to legislate every aspect of our lives.
    Of course satellite could afford to pay him even without resorting to stock options. Anon, if you had a chance to invest in all of cable telivision at its infancy, would you have done it? And, yes, people with brains do listen to Stern.
    My question is, is XM or Sirius the better investment? I went with XM since it’s by far the leader but Jeff seems to favor Sirius. Is the Clear Channel stak ein XM a problem? I actually think everyone would be best off if he cut a deal with both.

  10. Reid Avatar
    Reid

    “Reid, of course there’s free speech on radio. Maybe not absolute but there really isn’t absolute free speech anywhere.”
    In the decade I was on the air (admittedly, not in today’s environment), my freedom of speech was considerably more limited on the air than off. My speech off the air did not impinge on publicly owned airwaves, so I was not answerable to “equal time” charges over political speech. Nor was I subject to fines (or firing) for using particular words or talking about specific topics.
    And aside from the legal restrictions, there’s pressure from the need to profit. As an example, I might think Acme Local Products is operated by a con artist and ripping off customers, but if they are an advertiser or power broker in the community, my free speech about them has a price. Like, my job.
    So, you’re right, there is no absolute right to free speech anywhere, but it is even more restricted over the public airwaves, legally and otherwise. And as for the “otherwise,” that points out that there are times that even though you have the right to near-complete freedom of speech, it can have consequences. Freedom of speech does not free you from the consequences of that speech. Howard’s got a decade of fines as experience in that arena.
    Yet still, he speaks.
    “Reid, it’s in Mel’s interest to defend Stern even if he thinks he will go so that he has maximum leverage in any contractual dispute.”
    Yes. Which points out that [a] Howard agreed to honor a legally binding contract from which he profits to the tune of $18,000,000 per year, and [b] Mel/Infinity expect him to fulfill the remaining two years of that contract.
    A contract is a legally expressed version of “your word.” No one seems to give a whit if Howard goes back on his word, in fact, everyone seems to be preparing for that eventuality. Which, again, makes my point. This is primarily about getting out of one contract, and into a new one.
    “My question is, is XM or Sirius the better investment?”
    Another relevant question, which again makes my point. Have you considered buying Viacom stock? No, you’re seem to be looking to where the action is clearly moving…
    Again, I have no problem with Howard becoming the Father of Satellite Radio, and opening a new realm of radio competition. In fact, I think that would be a Good Thing for the existing radio market, in terms of a wake up call. What I do have a problem with is Howard’s attempt to wrap this up in a Constitutional matter that allegedly threatens us all. Other than a whole lotta talk, I’ve yet to see factual evidence that even Howard is under threat, never mind the rest of us.

  11. John P Avatar
    John P

    Jeff,
    One thing to add to the sat radio equation.
    Both companies need to reach somewhere between 2-3 million subscribers to reach a break even status. After that every additional subsriber is money in the bank.

  12. submandave Avatar
    submandave

    “can we argue that our First Amendment rights have been violated if the FCC successfully stifles political speech (no matter how it gets there)?”
    Jeff, you continue to equate purported FCC actions against Stern with supression of political speech. This in the absence of any other political speech being targetted by the FCC. I have seen nothing to show me that any interest paid to Howard by government agencies has anything to do with anything other than his sexual and excemental oriented topics. To hold him immune from censure based upon occasional and (previously) incidental political discussion opens the door to allow anyone to thinly veil themselves with “political” content for the same protections. The FCC’s actions against Bubba or Opie and Anthony or any others that have been fined for indecency have never been equated to supression of political speech, so why, now, is Howard being cast as a modern Nathan Hale?

  13. sol Avatar
    sol

    “Disagree. His political and anti-religious hate speech has no place in our society, and if crippling personal fines will teach him a lesson, so much the better”
    Trump, you sound a little ‘mobyish’ in these latest posts. Or, you know, like you’re maybe one of the pro-Stern voices here playing a character.
    The left are the people who call things ‘hate speech’. The left are the people most intent and most likely to restrict freedom of speech in this country. Speech codes, hate speech, getting the government to mandate ‘fairness’ (i.e. the official left view) on all programs because their ideas can’t compete in the market place of ideas (because they are bankrupt and worse). Etc.