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NEWS > BUSINESS > HOWARD STERN BE PAYED IN MONOPOLY MONEY AFTER SIRIUS XM MERGER

HOWARD STERN BE PAYED IN MONOPOLY MONEY AFTER SIRIUS XM MERGER

July 30 2008

New York, NY – With the Sirius  XM merger now official, focus now turns to how the new company will handle its combined business assets, specifically the star programs such as Howard Stern, Opie & Anthony, and range of exclusive sports programs. While much criticism was levied against the idea of the merger, the two companies made assurances that programming will not suffer. Now that the merger is a done deal, it’s time for the satellite radio giant to put up or shut up.

"We have worked diligently to close this transaction and we look forward to integrating our best-in-class management teams and operations so we can begin delivering on our promise of more choices and lower prices for subscribers," chief executive Mel Karmazin said in a statement. No specifics about programming were given.

Stern, with his 500 million dollar contract, is obviously at the centre of any talks about content. His show is far and away the most popular program on either network, and Stern himself was the most vocal proponent of the merger, due in no small part to his ownership of a significant number of Sirius shares.

The question now though is will the combination of the two companies be enough to vault non-terrestrial radio into the mainstream, or will it continue to limp forward and inevitably be replaced by web based broadcasting?

For Stern the way seems clear. He has continued his vocal support for the merger and the positive effects it has not only for his bank account, but also for the free speech and the future of radio. His contract, though, expires in 2010 and the question of whether or not the merged company will be interested in, or be able to, pay a premium for the Shock Jock’s services has to be foremost on his mind.
“Stern has put himself in an interesting position,” said Scrape TV business analyst Ken Green. “While he is no doubt the face of the company and worth every cent they pay him, monopolies rarely work out well for employees, no matter how high profile. Monopoly money is not the same as free market money, there’s no doubt about that.”

While not connected to the merger at this time, Hasbro, manufacturer of the monopoly board game may be a possible candidate to help the ailing stock price of the company and boost revenue.  

“Stern may take less to come back,” continued Green. “But I doubt he will take monopoly money. They may look to outside sources and fresh advertisers to lure him in. Hasbro has all kinds of monopoly money and they’ve been a perennial second place to Mattel. It may be a viable option that would allow them to be top dog somewhere. I don’t know of any place that you can spend monopoly money though. My guess is that Stern will get the real money and the shareholders will get the fake stuff. ”

Sirius XM Radio shares plunged 19.68 percent to 1.51 dollars in opening trade Tuesday, the first official day of the merger. Representatives for Stern, Sirius XM, and Hasbro did not return our calls.

William Ashford, Business Correspondent

NEWS > BUSINESS > HOWARD STERN BE PAYED IN MONOPOLY MONEY AFTER SIRIUS XM MERGER