The Stern announcement is a setback for Viacom's 185 stations, including Washington's WJFK-FM, since a popular morning show can generate as much as 50 percent of a station's revenue.
Joel Hollander, president of Viacom's Infinity Broadcasting, said he would "take Howard's headaches all day long. He is one of the great broadcasters of the era. . . . But nobody's bigger than any single medium." As for the cost of Stern's new deal, Hollander said: "At $100 million [a year], not happening on my watch. I'm not going to spend that kind of money. To me that is fiscally irresponsible."
Morning broadcast radio star Howard Stern has signed a five-year, $500 million deal with Sirius Satellite Radio, giving the fledgling medium a huge boost.
Transcript: Washington Post columnist Marc Fisher was online to discuss the announcement
With guests ranging from celebrities to porn stars and a seemingly endless stream of women who are coaxed into disrobing in the studio, Stern's show is a huge draw among a group coveted by advertisers -- males age 18 to 49 -- in many of the 46 markets that carry the five-hour program. While breaking the news yesterday, he told a 21-year-old model: "I'll have to undress you quickly because we're in the middle of a big announcement."
Sirius, which offers 120 channels of commercial-free music, sports, news and entertainment, is available to more than 10 million people through the Dish satellite television network or specially equipped car radios. The company, whose stock jumped 15.5 percent yesterday, to $3.87, has partnership deals with Ford, DaimlerChrysler and BMW.
Both Sirius and XM received FCC licenses in 1997 and took on the personalities of late-1990s start-ups, with XM setting up shop in a cramped Dupont Circle basement. The companies' stock soared as high as $65 a share.
Sirius had its three-satellite system in orbit before XM, which scrubbed launch attempts before successfully positioning its two-bird system. But Sirius soon fell behind, struggling with management difficulties and technical problems and replacing its chief executive. By early last year, Sirius was trading for pennies per share.
XM launched nationally in November 2001 with a splashy ad campaign featuring David Bowie and B.B. King. By the time Sirius debuted the following year, XM had more than 100,000 subscribers. Since then, XM has grown to 2.5 million subscribers, largely due to a partnership with General Motors that offers its radios in new GM vehicles.
Sirius offers National Basketball Association and National Hockey League packages in addition to pro football. XM, while carrying some baseball and college football games, has no similar sports lineup. But it snatched up Edwards after NPR abruptly dropped the host of "Morning Edition" after 25 years. XM has also hired Opie & Anthony, who were fired by Infinity in 2002 for an on-air stunt involving a couple having sex in a church.
XM, which had tried to lure Stern, views the announcement as "a good thing for satellite radio and, given the price tag, a very, very good deal for Howard Stern," said spokesman Chance Patterson.
Jim Farley, vice president of news and programming at Washington's WTOP, called yesterday's news "a seismic shift" in the industry. Satellite radio, he said, "is paying the price to get programming and cherry-picking the most popular stuff from broadcast radio. Satellite radio is bloodying the nose of over-the-air broadcasters."
Farley said stations such as his must fight back by making clear that over-the-air radio is still relevant, providing local news, traffic and weather and critical information in times of natural disasters and emergencies.
Stern's newfound freedom to use foul language and X-rated material could stir controversy among some satellite subscribers. Sirius's Clayton acknowledged that people like Stern "can be controversial and can polarize audiences," but he said users can automatically block any station on the network.
Stern transformed FM talk radio from his earliest days, spawning a legion of imitators. He was fired by Washington's WWDC in 1982 and by New York's WNBC three years later, but controversy seemed only to fuel his popularity. The self-styled "King of All Media" has written a best-selling book, "Private Parts," that was made into a movie, and portions of his radio show are rebroadcast on the E! network.
Stern said he had planned to abandon his show but now is "jacked up and turned on" by the possibilities of satellite radio. "It dawned on me: I don't want to leave radio. That's what I'm best at. What's been bugging me is all this interference. I literally can't be funny the way I want to be," adding that he has become so conscious of his language that "I can't even get a thought out."
He is clearly angry at the Bush administration, regularly calling for the president's defeat, and at Clear Channel Communications, the radio giant that dropped him from six of its stations last spring. Clear Channel later reached a $1.75 million settlement with the FCC over indecency charges involving Stern and others.
"My dream was to be syndicated across the country," Stern said. "Then Clear Channel gets in bed with President Bush. After 10 years on the air, they suddenly say, 'You're too dirty for us, goodbye.' These stations are worth $85 to $100 million to Clear Channel, and my goal is to make them worth five cents. Screw 'em. I think this can be done by making satellite a viable business."
Stern said he insisted that Sirius not charge a premium fee for his program because "I don't want to gouge my audience."