Clear Channel wants to kiss and make up with Howard Stern
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When Howard Stern left terrestrial radio for satellite radio in 2006 he did his best to blow up his old relationships. Not only did he blast his former employer, CBS, and its boss, Leslie Moonves, regularly on the air, he also got into a legal tussle with radio giant Clear Channel Communications after it stopped carrying his show in the wake of a Federal Communications Commission crackdown on indecency.
Now though, Stern is toying with coming back to FM radio and Clear Channel might be the ones rolling out the welcome mat. BusinessWeek is the latest to weigh in on a story about Stern’s next move and quotes Clear Channel radio head John Hogan saying ‘we would be the most logical company for him to optimize his exposure and financial return.’ It might be the only choice as well. Although Clear Channel is willing to forgive and forget about its rough past with Stern, CBS is less likely to want him back. Stern was particularly hostile to CBS and its chief executive, Moonves. That continued when he went to satellite radio as well.
Stern was one of radio’s biggest stars when he bolted for Sirius in 2006. His exit from so-called free radio was a big blow not only to CBS, but the industry overall. Stern was carried on almost 50 radio stations across the country. His show generated almost $100 million in advertising revenue and an additional $50 million in cash flow for CBS.
He was also one of radio’s highest-paid personalities. At CBS, Stern’s compensation was around $30 million (that included revenue from the show’s syndication deals). When he went to Sirius, his paycheck hit the stratosphere. His package called for compensation of $100 million a year. That figure included salaries for his cast and crew but it still allowed him to take home about $50 million a year.
Sirius is run by Stern’s old boss, Mel Karmazin. The two have been in business together for more than two decades, so one would think it would take a lot for Stern to jump back to FM radio when his contract is up at the end of this year.
Speaking at an investor conference last month, Karmazin gave a tongue-in-cheek preview of how his talks with Stern will go.
“It will start with Howard feeling that he is working too hard and doing too many shows and not making enough money,” he said, adding that the response will be ‘we want you to do more, and get less money.’
The terrestrial radio industry was already struggling when Stern left at the end of 2005 and the business has only gotten tougher. It is hard to imagine that Clear Channel would spend anything like what Karmazin spent to lure Stern to Sirius. Of course, considering that Sirius stock now trades for under a dollar, it is also unlikely that Karmazin can afford to keep Stern at his present salary much less give him a raise.
Money may not be the only factor Stern considers when deciding his future. The plus side of Stern moving to satellite was that it freed him of scrutiny from the government. He can swear and have all the porn stars on his show that he wants.
The flip side is that since going to satellite Stern has fallen off the cultural zeitgeist. He does not get the attention from the mainstream media and the general public that he used to command when he was on FM radio. And that’s not something you can put a price tag on.
-- Joe Flint