Interscope, Merrill give Sirius advantage

Artists offered include U2, No Doubt, Crow

Hotcake stock Sirius said Monday it’s inked an exclusive marketing pact with Interscope Geffen A&M Records, whose topper Jimmy Iovine will help develop programming for the Gotham-based subscription radio satcaster.

Last year, Iovine helped broker a deal for Eminem to co-produce hip-hop channel Shade 45 on Sirius. Current deal calls for Interscope, a unit of French conglom Vivendi’s Universal Music Group, to offer its artists, which include U2, No Doubt, Sheryl Crow, 50 Cent and Queens of the Stone Age, for marketing and promotion opportunities and, potentially, new radio shows.

Sirius shares jumped 4.46% to $6.09; last summer Sirius was trading at about $2.

Separately Monday, Merrill Lynch initiated analyst coverage of Sirius with a buy recommendation.

Investment bank cited key install options with Ford and Chrysler, new retail products and an influx of Howard Stern subscribers once the shockjock jumps ship from CBS. Sirius CEO Mel Karmazin, the former No. 2 at Viacom and a veteran of traditional broadcast radio, “brings decades of media experience and a reputation for strict cost discipline,” Merrill said.

Merrill sees 30% upside potential for stock of money-losing Sirius and positive cash flow in 2007.

Sirius chief financial officer David Frear said earlier this month that Sirius had a “blowout” holiday season and expects fourth-quarter results to reflect a sharp uptick from the previous quarter.