NEW YORK (Reuters) – Howard Stern to Sirius XM Radio Inc. surprise the listener at least for five years, satellite radio news pushed shares of the company to more than 6 percent.
Under the new contract was announced on Thursday, Stern will broadcast up to December 31, 2015, and the content will be available for athletes shock the first time on mobile devices, Sirius XM said in a statement.
Stern last five years, $ 500 million contract with Sirius XM Radio ended this month, and investors were worried that customers will leave the service if it continues.
One estimate says Stern to bring 1.2 million customers on board when it merged with Sirius in 2006. Join Sirius XM Satellite Radio in 2008, and the service now reaches 20 million listeners.
There are no other terms of new contracts are disclosed. (For more stories on the Breakingviews Stern, see [ID: nN09102988])
Stern, who often swore on the air and the characteristics of the adult content on his event, known to surprise audiences. He was fined several times while he was on terrestrial radio.
Analysts said investors can breathe easier now that Stern has described the future.
“It’s a cloud over this year, Sirius XM,” said Lazard Capital Markets analyst Barton Crockett.
The full impact of Sirius XM will not be clear until more details of the new contract came to light, analysts said.
“The question is what kind of package is displayed together?” The word Maxim Group analyst John Tinker.
Sirius XM has stated that the programming costs continue to decline from year to year, and Wall Street’s hope Stern will receive less under the new contract.
Crockett estimates that Stern will get a $ 80 million in in cash, the same amount he makes now, but not $ 100 million in stock during the five years that he received earlier.
Stern first announced that it has reached an agreement with Sirius XM in the early morning and on his website.
Sirius XM said last week that it has struck a new contract with the National Football League to broadcast games through 2016 and the river play-online-play.
Sirius XM is also home to the program by Oprah Winfrey and Major League Baseball. It has posted four straight quarters of profits and customer numbers continue to increase, stay away from large losses and questions about the business model.
Most of the growth comes from customers that the new car buyers that the radio is installed. Almost half of customers becomes a full paying customer conference after the end of the campaign.
Sirius XM shares rose 6.4 percent at $ 1.40 in afternoon Nasdaq trading.
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