* Stern to remain at Sirius XM for five more years
* Deal involves streaming rights on mobile devices
* No other details of contract disclosed
* Sirius XM probably will pay Stern less-analyst
* Shares up 6.4 pct
(Adds link to Reuters Breakingviews story, background and
subscriber information on Sirius XM; updates share price)
By Liana Baker
NEW YORK, Dec 9 Howard Stern will be shocking
Sirius XM Radio Inc (SIRI.O) listeners for at least five more
years, news that pushed the satellite radio company's shares up
more than 6 percent.
Under a new contract announced on Thursday, Stern will be
broadcasting until Dec. 31, 2015, and the shock jock's content
will be available for the first time on mobile devices, Sirius
XM said in a statement.
Stern's previous five-year, $500 million contract with
Sirius XM Radio expires this month, and investors had been
concerned that subscribers would abandon the service if he were
to move on.
One estimate says Stern brought 1.2 million subscribers
aboard when he joined Sirius in 2006. Sirius merged with XM
Satellite Radio in 2008, and the service now reaches 20 million
No other terms of the new contract were disclosed. (For a
Breakingviews story on Stern's worth, see [ID:nN09102988])
Stern, who often swears on air and features adult content
on his show, is famous for shocking audiences. He was fined
several times when he was on terrestrial radio.
Analysts said investors can now breathe easier that Stern's
future has been settled.
"It's been a cloud over Sirius XM this year," said Lazard
Capital Markets analyst Barton Crockett.
The full impact on Sirius XM will not be clear until more
details of the new contract come to light, analysts said.
"The question is what kind of package was put together?"
said Maxim Group analyst John Tinker.
Sirius XM has stated that its programming costs would
continue to fall year-over-year, and Wall Street is hoping
Stern will receive less under the new deal.
Crockett estimates that Stern will get $80 million a year
in cash, the same amount he makes now, but not the $100 million
in stock over five years that he had previously received.
Stern first announced that he had reached an agreement with
Sirius XM on his morning show and on his website.
Sirius XM said last week that it had struck a new contract
with the National Football League to broadcast games until 2016
and stream the play-by-play online. [ID:nN30272021]
Sirius XM is also home to programs by Oprah Winfrey and
Major League Baseball. It has posted four straight quarters of
profit and is steadily adding subscribers, distancing itself
from years of huge losses and questions about its business
Much of its subscriber growth comes from buyers of new
cars that have the radios installed. Nearly half of the trial
customers become full-paying subscribers after the promotions
Sirius XM shares were up 6.4 percent at $1.40 in afternoon
(Reporting by Liana Baker; Editing by Derek Caney and Lisa Von