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Howard's end?
The shock jock is almost dead on the public airwaves: One more indecency blunder and Stern is off.
December 27, 2004: 6:26 PM EST
By Krysten Crawford, CNN/Money staff writer

NEW YORK (CNN/Money) - The shock jock died Thursday on public radio.

On Dec. 23, a portentous deal reached last month between Viacom, the owner of the country's second-largest radio station operator, and federal anti-indecency watchdogs went into effect.

On top of paying $3.5 million to end several ongoing investigations of on-air public broadcasts, Viacom (Research) agreed to additional measures aimed at preventing future material deemed obscene, profane or indecent.

If Viacom has lived up to settlement terms, Howard Stern has now gone through sensitivity training.

Worse for Stern, if the Federal Communications Commission issues another "Notice of Apparent Liability" (the official sign that decency cops think laws were broken), then Viacom has agreed to yank Stern off the air.

The consent decree covers only broadcasts from Dec. 23 and on.

Stern, who claims he was unaware of these provisions, expressed outrage earlier this month, arguing that he's been set up to be canned and threatening to play only music. Listeners won't know what Stern plans to do until Jan. 3, when he returns from vacation.

Michael Harrison, the publisher of Talkers magazine, said Stern isn't the only radio jock who's been told to watch his mouth by employers fearful of FCC fines.

"All across the board, most of the major companies have enacted some type of hard-core rules that basically set the record straight that the talent has to take every opportunity to keep indecency off the air," said Harrison. That includes requiring disc jockeys and talk radio hosts to sign forms allowing stations to pull them off the air for the "slightest infraction."

Harrison called the FCC crackdown on indecency in 2004 -- which included a record $7.7 million in fines -- the biggest story in talk radio. He said there's "no question" that the year marked the end of the shock jock on public radio.

What's Howard going to do?

Stern, who will move his morning show to Sirius Satellite Radio in Jan. 2006, isn't the only radio star fleeing to unregulated satellite radio. Gregg "Opie" Hughes and Anthony Cumia have already taken their raunchy show to XM Satellite Radio (down $0.19 to $39.73, Research).

Stern has a year remaining on his employment contract. Given Viacom's consent decree, that's a year in which Stern can't run afoul of decency rules. If he does, he risks being fired. And if he's fired for cause, Viacom doesn't have to pay him lost wages. Analysts estimate that Stern and his cohorts take home more than $30 million a year.

As is often the case with Stern, there's been rampant speculation about the underlying motives at work. Does Viacom want Stern out?

A spokesperson with Infinity Broadcasting, the Viacom subsidiary that airs 'The Howard Stern Show' daily on 27 stations, declined to comment. Don Buchwald, Stern's agent, also declined to comment.

It's no secret that Stern and his Infinity bosses have clashed repeatedly over Stern's unabashed on-air promoting of his Sirius (up $0.15 to $8.10, Research) move since he announced it in early October.

A month ago, he staged a press conference in Manhattan where he gave away hundreds of free Sirius Satellite boom boxes.

Stern also said that Sirius could buy out the remainder of his contract. Analysts saw that as a sign that Sirius and Viacom were talking about accelerating Stern's exit.

"I think the parties are talking," said April Horace of Janco Partners.

Howard Stern
Federal Communications Commission (FCC)
Sirius Satellite Radio Incorporated
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Sirius Satellite chairman Joseph Clayton has publicly declared he'd like to bring Stern over to his service sooner than 2006.

To lure Stern, Sirius agreed to a five-year, $500 million deal that includes the celebrity's salary and all other costs associated with this show. Sirius needs to generate one million new subscribers a year to cover the cost of the deal.

At the same time, analysts note that keeping Stern on the public airwaves means a year of free Sirius advertising to an estimated 12 million listeners.

But earlier this month, speaking at an investor conference in New York, Infinity Broadcasting president Joel Hollander said the company is "feverishly" looking for Stern's successor but so far is unwilling to give up the $100 million in advertising revenues that the Stern show generates each year.

As for Stern, he's been sending mixed messages. The deejay said recently that he doesn't want to leave Infinity early and intends to fulfill his contract.

But Stern excels at using the rumor mill to draw listeners. In June, after all, he said he would not go to satellite radio. Just four months later, he announced his move to Sirius.

How this saga will play out in 2005 is one prediction nobody wants to make. One thing is certain: after Jan. 3, the story will get even more interesting.  Top of page

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