Sirius Satellite Radio awarded shares worth about $219 million to shock jock Howard Stern before his debut next week, saying he attracted enough subscribers to trigger the payment under his contract.
Sirius will transfer 34.4 million shares to Stern and his agent on Monday, the day the show first airs. The shares have doubled since October 2004, when they were issued to Stern and his agent Don Buchwald, Sirius spokesman Jim Collins said Thursday.
Publicity surrounding Stern’s move to Sirius, the No. 2 U.S. satellite radio broadcaster, propelled the company’s sub count past 3.3 million, hitting a target that triggered a transfer of the shares to Stern and Buchwald.
“Howard Stern is a business,” Craig Moffett, an analyst at Sanford C. Bernstein in New York, said. “Sirius is paying, in essence, a license fee for what is a large and successful business.”
Sirius shares rose 3¢ to $6.39 Thursday. They had fallen 15% in the past year. XM shares fell 55¢ and have dropped 21% in the past year.
Under Stern’s five-year, $500 million employment contract that includes his pay, staff salaries and other costs, he was to receive the shares in December 2010 or earlier if the goal was met. The target was reached on Dec. 31, Sirius said Thursday in a filing with the Securities and Exchange Commission.