Stern Gets Rights to Tapes In Settlement With CBS

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By Frank Ahrens
Washington Post Staff Writer
Saturday, May 27, 2006

CBS Corp. and former employee Howard Stern have settled a lawsuit brought by the network claiming breach of contract when the shock jock left for Sirius Satellite Radio at the end of last year.

In the settlement, Sirius agreed to pay CBS $2 million. In exchange, Stern gets control of the master tapes of the past 20 years of his shows on CBS, meaning the company cannot broadcast archived Stern shows without paying him.

"As part of the settlement, CBS Radio will receive payments relating to the conveyance of its rights in recordings of the Howard Stern show," CBS said in a statement yesterday. "Sirius, for its part, will make a total payment of $2 million related to this conveyance."

The statement said the remaining terms are confidential.

However, CBS will receive more than $2 million, said a source with knowledge of the settlement who spoke only on condition of anonymity because of confidentiality agreements.

The company's statement noted that CBS will receive "payments" -- plural -- in addition to the Sirius sum. Because Sirius is a public company, the $2 million payment will be reported on required Securities and Exchange Commission documents. But Stern is not a public company; therefore, he could make an additional payment to CBS without having to report it, thereby keeping it secret and maintaining his on-air bragging rights over the network.

In February, CBS sued Stern for at least $200 million -- the network did not pinpoint the total damages it sought -- claiming he improperly used CBS radio airtime in the last few months of his employment there to promote his new employer. The sum was nearly equivalent to the worth of Sirius stock shares Stern would receive if the service reached a certain number of subscribers.

Sirius announced earlier this spring that it had added 1.3 million subscribers in the fourth quarter of last year, just before Stern debuted. In the first three months of this year, Sirius added about 535,000 new subscribers, illustrating the Stern effect on the service.

CBS also said that Stern negotiated with Sirius without informing his current employer, also a breach of contract. Don Buchwald, Stern's high-powered agent, was also named in the suit.

Stern fought back by assailing CBS chief executive Leslie Moonves on-air and on CBS's "The Late Show with David Letterman."

For jumping to the satellite company, Stern received a five-year contract worth $500 million. He is by far the biggest name to leave over-the-air radio for satellite. The ratings impact on stations that carried Stern has been enormous. Local station WJFK, where Stern helmed the morning-drive slot for years, lost half of its audience in the first three months after he left, according to Arbitron ratings released in April.

Stern received more than $23 million in compensation in his last year at CBS, according to the February suit.


© 2006 The Washington Post Company

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