Speaking at Wednesday’s (9/15) Bank of America Merrill Lynch investment conference in Newport Beach, CA, Sirius XM CEO Mel Karmazin expressed confidence about renewing the two really big content contracts which are expiring in the coming months. But he also hedged his bet a bit when it came to renewing Howard Stern.
Karmazin told the gathering of investors that numerous contracts have come up for renewal for the satellite radio company, not just for content, such as with Oprah Winfrey and ESPN, but also with the auto makers. And to date, he noted, not a single contract has not been renewed in some form. So he’s upbeat about what’s going to happen with the two biggies being dealt with right now. Karmazin said he believes the company has a renewal deal with the NFL, although it’s not yet ready to officially announce. And he remains “very confident” about the talks with Howard Stern.
For his part, Stern has also been talking about the contract negotiations, recently telling listeners that he was “pretty sure” he was leaving Sirius XM – and then – almost without a break, talking about what he’d like to do under a renewed contract.
Since the current Stern contract is up at the end of this year, Karmazin repeated his previous indication that he hoped to have something to announce when Sirius XM reports its Q3 earnings in November.
Karmazin called Stern a “fabulous partner,” both from when they worked together at Infinity/CBS Radio and most recently after Karmazin took the helm at Sirius, which then merged with XM. The CEO went out of his way to avoid any criticism of the Sirius deal, cut before his arrival, which has paid Stern more than $600 million over five years, saying it made sense to both parties at the time it was signed.
But Karmazin also made it clear that failing to renew Stern would not be the end of the world for Sirius XM. He pointed to research that most listeners to the satellite radio service listen to multiple channels. But yes, he acknowledged, there are some who listen only to Stern and those subscribers would be lost if Stern’s contract is not renewed.
RBR-TVBR observation: Can we get Las Vegas odds on whether Stern will stay or go? We think the smart money is on “stay.”