Howard Stern: 5 more years with Sirius

howard_stern.gi.top.jpgHoward Stern has signed another five-year contract with SiriusXM. By Aaron Smith, staff writer


NEW YORK (CNNMoney.com) -- Howard Stern has signed another five-year contract with SiriusXM Radio, putting to rest speculation that he might leave and sending the stock on a double-digit surge.

The raunchy radio host made the announcement Thursday morning, but he was scant on details, such as pay.

The announcement quelled concerns that Stern might leave the satellite radio company. Sirius (SIRI) stock surged as much as 14% in pre-market trading, and recently backed off its peak for a 9% gain.

The raven-locked shock jock has been with the radio station since December 2005, when he signed a five-year contract for $500 million. At that time, paid-subscriber radio was viewed as an experiment.

For now, the experiment seems to be working. The stock is up about 120% so far this year, though its relatively low value of less than $2 per share can spur price volatility.

A rebound in the auto industry is a big part of the radio station's boon. The majority of its subscribers are tied to deals with automakers including General Motors (GM), Ford (F, Fortune 500), Honda (HMC) and Toyota (TMC), which pre-install Sirius radios.

The company expects to have more than 20 million subscribers by the end of the year, having added more than 300,000 in the third quarter.

"On my first day in satellite radio Sirius had approximately 600,000 subscribers," said Stern, in a press release. "Today, the two companies [Sirius and Howard Stern] have 20 million and, in my view, we have just scratched the surface of how many people will get on board."

The new contract, which begins Jan. 1, includes rights for SiriusXM to transit programming to mobile devices.

Martin Pyykkonen, an analyst with Wedge Partners in Denver, had estimated that as many as 2 million customers would have canceled their subscriptions if Stern left. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,982.59 22.02 0.13%
Nasdaq 4,444.91 -4.65 -0.10%
S&P 500 1,978.91 0.57 0.03%
Treasuries 2.49 0.02 0.89%
Data as of 7:27am ET
Company Price Change % Change
Apple Inc 99.02 1.35 1.38%
Facebook Inc 74.92 -0.27 -0.36%
Bank of America Corp... 15.50 -0.09 -0.58%
Dollar Tree Inc 54.87 -0.08 -0.15%
Family Dollar Stores... 75.74 15.08 24.86%
Data as of Jul 28

Sections

New annual report from U.S. government shows the long-term prognosis for Medicare has improved thanks to slower health spending, while the outlook for Social Security remains unchanged. More

Actor-founded This Bar Saves Lives had Hollywood connections, but learned Start-Up 101 the hard way. More

Steve Mason, a pastor from California, inherited more than $100,000 in student loan debt when his 27-year-old daughter died suddenly in 2009. With interest and late penalties, the debt has since ballooned to $200,000. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.