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.]
: 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.
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