Tuesday, December 21, 2010

Lies About Howard Stern Continue

Howard Stern triumphantly resigned with Sirius XM for another five year period, and by all estimates he's the highest paid radio personality on the planet. As I mentioned in my last post, Howard's new deal is even better than his last one. But I also mentioned that for a lot of reasons, the very favorable financial terms are not being played up, particularly by Howard.

Despite the fact it's a great deal, and proved that any talk of Howard taking a pay cut was bogus, a lot of people in the press still won't give Howard credit for all the success he has earned, particularly when it comes to bringing home the bacon for Sirius XM. Recently, the Hollywood Reporter tried to dismiss Howard's importance by saying that only 1 out of 10 Sirius XM subscribers listen to Howard. (Other pundits have cited similar unverified statistics saying that only 10% of Sirius subscribers listen to Howard.)

Sirius doesn't release details about its ratings, so these numbers are pretty much guesses and my sources tell me they are at best misleading and, at worse, flat out wrong.

For starters, even 10% would mean at least two million Sirius XM subscribers representing almost $300 million a year in revenue, far beyond the $80-100 million dollar cost of the show. Two million listeners is also far beyond the supposed one million subscribers some pundits claimed Sirius would lose if Howard Stern refused to sign a new deal. The claims that Sirius would "only" lose one million subscribers (making a deal with Howard Stern a wash) seemed to be based on the false assumption that at least half of Howard's listeners would keep subscribing even if he left.

That was something Sirius XM certainly didn't want to take a chance on. Because the real test of Howard's importance to subscriptions had already played out over several years in the pre-merger battle between Sirius and XM.  XM, despite having almost a ten million subscriber lead, and arguably better technology and unarguably better car deals, lost. When people had the choice of subscribing to a service with Howard, or without him, they chose the one with Howard. Even if they didn't end up listening to him, they liked having the option. That's why XM was forced to merge.

The "only 10%" number also ignores one of the harsh realities of satellite radio that "two million Howard Stern listeners" miss. The vast majority of new Sirius XM subscribers come from people who buy a new car, and choose the service as part of their car deal. Most often, they get a subscription for free. And unfortunately for Sirius XM, most often at the end of their free subscription, they don't renew. There are millions of cars equipped with satellite radio that don't work anymore because their owners stopped paying for subscriptions. Churn in satellite is quite high, not only for cars, but also amongst people who get special deals to buy radios with free subscriptions, but eventually drop the service.

The one bright spot for Sirius is Howard Stern listeners. People who regularly listen to his program continue to subscribe year after year. Many of those millions have been subscribing for over five years. So even a 10% base of loyal subscribers, augmented by a churning base of new subscribers who test out the service, is critically important.

But that 10% number isn't really accurate. The truth is, over half of all satellite subscribers, including those churning through free subscriptions, have listened to Howard at least once. So in any given year, the number of people who listen to Howard via satellite radio is about ten million, or 50%. Somewhere close to 30% of subscribers check Howard out at least once a month. Where the 10% number came from is unclear, at best it represents the number of Howard's regular daily listeners.

But Howard's day to day numbers change radically from week to week. Much more so then when he was on traditional radio. This is in a large part due to the fact that much of the audience is churning through free subscriptions (and might check him out for a while and then try other programs).  Also it's important to understand that there is a great deal more choices on satellite radio. On traditional radio, Howard's show was one of maybe 10 to 20 choices a car driver had of stations that would get a clear signal. On Sirius XM, there are are over 100 channels to choose from.  Howard's show has commercials, which the music channels (and many others) don't. So the danger that a subscriber might be listening to Howard, then change the channel because of a commercial, and not come back is greater than on traditional radio where all the choices had commercials.  But providing choices is what pay radio is all about.  If you don't have choices, why bother?  So if Howard were to leave, even people who don't listen regularly would feel they were missing something.

Here's the statistic that is most important for Sirius, and the reason Howard's deal was not only re-upped, but improved. What's the most popular show on Sirius XM?  HOWARD STERN.  By far.  Everyday, every week, every month, every year, more people listen to Howard Stern's show than ANY other program. What's the second most popular program? The number 1 music channel. (Meaning a lot of those free subscribers simply don't even bother to change the channel, or can't figure out how to find Howard.)

"Ratings" per se are not as important to Sirius as subscribers and don't translate as accurately as in traditional radio. But here's an important statistic: on average during "morning drive time hours" over one third of Sirius XM subscribers who are listening to their service, are listening to Howard Stern. The number sometimes goes as high as 50%.

The difference between the 30%-50% of Howard Stern morning listeners and the supposed 10% of daily Howard Stern listeners has to do with the fact that most of the time, a person's satellite radio is simply not turned on. People either aren't in their cars or listen to CDs or traditional radios (and troubling for Sirius XM, iPods and the internet). A lot of subscribers don't commute, and so being able to spend several hours listening to Howard isn't as compelling as spending a few minutes listening to commercial free music. But that doesn't mean they don't like having the option of listening to him if they decide to take a long drive somewhere.

During the height of his popularity on traditional radio New York, I'm sure less than 10% of New Yorkers listened to Howard Stern daily. But his influence on the radio market was much larger than 10%. On Sirius XM, his importance is even greater. Generally speaking, if someone turns on a Sirius XM radio, who has actually paid for a subscription, the single program they overwhelmingly turn on to listen to is Howard Stern.

Finally, it's important to understand that Howard's numbers go up radically whenever there is a controversy involving him (which there often is) and when he decides to do some promotion. For example, after a Letterman appearance, Howard's daily number of listeners will spike as some old subscribers remember how funny he is, or some new ones decide to check him out. This is why Sirius XM is constantly after Howard to do more promotion. But under Howard's old deal, all of his financial incentives kicked in after he reached his promised base of subscribers, which he did easily in his first year. He had no incentive to do more publicity.

Under Howard's new deal, that has changed. He has specific incentives based on how many listeners he gets off the internet, and thus he finally has a reason to try to boost his daily listenership. Based on that, this misleading 2 million listeners number is likely to be blown away. Howard has shown many times in the past, that he knows how to get people to listen to his program. I think that's what he meant when he said upon signing his new deal that he felt he wasn't finished. The next five years might see the Howard Stern publicity machine unleashed.

Tuesday, December 14, 2010

No Pay Cut For Howard Stern: Insider Details on the Sirius XM Contract

Howard finally announced a deal to stay on Sirius XM for another five years, ending a year of high profile speculation as to whether he would stay or go.  During that year, there were more than a few rumblings from Sirius, amplified by media pundits, that he would have to take a pay cut from his loftily original $500 million deal five years ago.  This despite the fact that Howard put Sirius on the map.

Long story short.  Howard didn't take any freaking pay cut.

In fact, his new deal is better than the old one.  This is no surprise.  Sirius went from 300,000 subscribers when Howard announced his original deal, to over 20 million after it merged with XM (a merger forced by the success of Howard's program).  Even the most conservative estimates put Howard as directly responsible for at least a billion to 1.5 billion in revenue during those five years with untold billions in additional revenue due to his high profile sponsorship.  Sirius is also at a critical juncture as internet radio is taking off.  It simply couldn't afford to lose Howard, or even worse, see Howard directly compete with it on some new internet station.  Again, the most conservative estimates are that Sirius would have lost at least a couple million subscribers, but the damage to its brand would have been much much worse.

So why all the talk about a pay cut to begin with?  And why isn't Howard crowing about how much better his new deal is?

Because Sirius DID overpay for a lot of other programming in the past.  Howard has often pointed out that Sirius overpaid for Oprah and Martha Stewart, who don't put much time into their channels and don't get anything close to his ratings.  Sirius and XM also paid huge fees for sports programming back when they were competing with each other.  Sirius XM has finally become profitable, and the time for overspending on programming is over.  So getting out the word that even its most high profile property has to cut back, is a message they really wanted to send to the world.  Unfortunately for Sirius, Howard is the one person they can't afford to lose.

But Howard is no dummy.  While publicly railing that he wasn't going to take a pay cut, and privately negotiating a great deal, he's happy at Sirius and wants the company to succeed.  As a businessman, and a master PR person, he is willing to keep his mouth shut so they can get tough on other negotiations.  Thus we hear that his old deal was $500 million and his new deal is only $400 million.  Howard won't go out of his way to correct that.  But the truth is more complicated.

One of the problems for Sirius XM during the negotiations was that Howard held all the cards.  They want a pay cut?  Sure, Howard would move his show to a later hour in the day.   NO!   We can't do that, the fans will complain.  Okay, still want a pay cut?  I'll make a deal to broadcast on traditional radio a better show.  NO!   We need you exclusive.  Fine, still want me to take a pay cut, I'll stop doing any promotion, and you can't use my likeness to sell subscriptions.  NO!  We want you to go on Letterman again!

There are a ton of ways Sirius XM could have made a deal with Howard that would have cost them a lot less, but the truth is, they didn't dare tamper with the formula that works so well, and they desperately want Howard happy so he does additional promotion for them.  Especially now when they are in a fight for their lives when it comes to internet competition.  So basically, in the end Sirius XM completely rolled over.  No pay cut was the very beginning.  But the deal is better for Howard in a lot of other ways too.

What is the deal?  Here's what I have put together from a variety of secret sources.  I can't say it's 100% accurate, but it's pretty close.

First, it's important to understand that Howard's original deal wasn't simply for $500 million.  It was a complicated deal with a lot of components.  The most point is that under both deals (and Howard previous traditional radio deals) Howard owns his program.  So in effect, Sirius simply pays him for the right to broadcast during a limited window, and Howard is free to exploit the material in other media.  But, of course, Sirius also pays a huge fee for an exclusive window so Howard won't put it on 
competing channels during his contract term.  With a few exceptions like Howard TV.

When Howard originally signed with Sirius, the idea was also that Howard wouldn't take a pay cut from what he was getting on traditional radio.  Plus, if he helped Sirius get a lot of subscribers, he would get a bonus.  Howard's show back on traditional radio had a budget of about $70 million a year (a large percentage of which went to Howard, something like 50 million).   On Sirius, Howard's show cost them approximately $80 million a year, which included programing 24 hours on two channels.   So in some ways, Sirius was getting a lot more for the dollar than traditional radios stations were.  On the other hand, Howard only did his show 4 days a week on Sirius, so it could be argued he was getting more for working less (especially in terms of building up a valuable library).  But the truth is, Howard put in a lot of extra hours programming the channels and promoting Sirus.

So $80 million a year over 5 years is $400 million.  In addition to that, Howard received what amounted to a bonus of $100 million if he delivered two million subscribers, something he did in a heartbeat.  But even that wasn't so simple.  The $100 million was in stock related bonuses, and Howard got a large part of it upon signing.  If Sirius had done better in the stock market, Howard actually could have gotten more.  But Sirius (due to overpaying on other deals) hasn't done very well in the stock market.

Moreover, the $80 million a year in programming costs to Sirius aren't really $80 million.  Sirius makes millions each year selling advertising on Howard's program, in addition to the subscriber revenue.   Most of that money goes to Sirius under a complicated formula.  But a lot of it is kicked back to Howard to encourage him to do on air ads, and support advertisers.  On the other hand, Howard didn't tie his original deal strictly to advertising, because he didn't want pressure to put too many ads in the programming, something both he and his fans hate. (But Howard does like occasional breaks, so some advertising is alright).

Meanwhile, Howard gets almost all the money from Howard TV, Howard's cable on demand programming.  While Howard TV is not as big as the radio program, this is still worth millions in revenue.  Since the radio show is financed by Sirius, and the TV programming costs little to produce, Sirius is in effect proving a budget for Howard to make additional millions in television. And own the library.

So that's the old deal.  What's the new one?  Well, it was based on three principles:  1.  Howard was happy with Sirius and didn't want to leave.  2. Howard wouldn't take a pay cut, but wouldn't ask for a huge pay hike.  3. Howard didn't want his deal tied to Sirius XM stock or overall performance.

As I've said before, Howard didn't need to take a pay cut, and Sirius was not in any position to ask him to take one.  On the other hand, Howard had no real desire to leave Sirius.  He was happy with the show, the facility and the freedom he has there.  There are plenty of places Howard could have gone to try to get a better deal, but he never seriously explored them.  It gets into a classic risk reward scenario.  Howard took a huge risk in going to Sirius and it paid off in a big $100 million dollar bonus.  Howard could have gone to an internet radio company, or formed his own, and made even more money.  But it would have been a lot of risk and a lot of work.

Instead, Howard agreed to basically continue at Sirius under the old deal for $80 million a year.  It's actually a little bit of a bump.  The old deal was a little under $80 million and the new deal is a little over $80 million to account for inflation.  Howard's profit sharing deal in regard to advertising also has some bumps, again, primarily to encourage him to do on air spots.

But, in exchange for not asking for a huge pay increase, Howard did ask for a big piece of any new revenue related to the internet.  Howard's show hasn't been on Sirius XM's online offerings, and in exchange for allowing it to be streamed, Howard will get a big piece of revenue from that, under a very complicated formula.  Howard also gets an even bigger piece if Sirius offers an internet only subscription.

In the meantime, Howard has more freedom to make money on his television deal.  The biggest hold back on Howard TV has been that the cable companies take a huge piece of any revenue Howard gets for his on demand service.  As part of Howard's new deal with Sirius, Howard has the option of making his video programming available over the internet, or Apple iTunes' downloads.  This gives him the option of abandoning the cable companies, or forcing them to make a better deal.  Howard can also make a deal for a syndicated "best of show" like his old E! network show or his late night CBS show.

Lastly, for the first time, a formula has been worked out that will allow Howard to make some of his older programming and best of shows available on iTunes for downloads, with Howard getting most of the revenue for that.  And as always, Howard controls all his merchandising and is non-exclusive in terms of movie, music and book deals.

So in the end, no pay cut, a little bump, and more freedom to make lots more money if Howard wants to put the effort into it.  This is why the fact that Howard's deal isn't tied into Sirius stock is so important.  While Howard has made a ton of money thanks to Sirius, Sirius has made a lot more thanks to Howard.  If Sirius isn't in a position to pay Howard more money, mostly due to wanting to keep their deals cheap with everyone else, Howard shouldn't be limited in the money he can make elsewhere, provided it doesn't hurt Sirius.

For several decades, Howard has been very careful not to oversaturate the public (as if 5 hours of radio show a day wasn't enough).  He hasn't allowed much merchandising, and has been selective about movies, books and other cross promotion.  It's an open question whether this was a good call, adding to his longevity and bargaining position, or a missed opportunity to cash out.  Regardless, it's the way he wanted it.  But if he is serious that this is his last five years on the air, there is little reason for him to be as selective as before.

Instead of that $100 million dollar stock bonus, Howard could make much, much more by releasing a History of Howard Stern boxed set, downloads, DVDs, syndicated shows, etc.  His new deal gives him all those options and more.

Pay cut?  Hardly.  Howard cut an amazing deal, worthy of a unique and valuable talent.

Sunday, November 7, 2010

Why Sirius XM Can't Afford to Lose Howard Stern

Still no word yet on whether Howard Stern will re-sign with Sirius XM.  His contract runs out at the end of this year and Howard is making noises on his show that he is likely to leave.  Meanwhile, Sirius XM is unconvincingly trying to make a case that his loss won't hurt them.  It will.  In fact, Sirius XM might not survive if he leaves.

The argument that losing Howard is no big deal was voiced third hand (as it often is) by industry "analyst" (ie: corporate friendly mouthpiece) Matthew Harrigan.  In a Hollywood Reporter story, Harrigan uses dubious math to suggest that the loss of Howard Stern's show would be a wash.  He states that since Howard is paid a hundred million dollars a year, Sirius could lose a million subscribers and still come out fine.  He goes on to say, that if Sirius loses less than a million subscribers, it would even come out ahead.

The first problem with this is Harrigan himself estimates that Howard has 3 million Sirius XM listeners.  So why would only one third of them drop Sirius?  If half of them dropped Sirius, we're talking about a loss of revenue of over 50 million beyond any savings in Howard's salary.  Howard's fans are pretty passionate, and Harrigan doesn't bother to wonder what would happen if Sirius lost them all.  The answer is, bloodbath.  The loss of that many would mean a cut of 300 million in revenue.

But the true numbers are even worse.  Sirius XM doesn't release stats on Howard's listenership, because the truth is too frightening.  3 million is the number of regular, and that means daily, listeners.  Over 6 million Sirius XM listeners sample Howard every month.  And the number is almost 10 million who sample him once a year.  Would ten million subscribers drop Sirius XM if Howard left?  No.  Or at least, not right away.  But the impact of Howard Stern's loss would be far greater than the number of his regular listeners would indicate.

Because Howard Stern provides a special value to Sirius that it has been unable to duplicate with anything else.  Howard is currently the only thing that satellite radio has exclusively that anyone cares about.  These days you can get music anywhere, and even without commercials.  Sirius XM has a lot of sports, and those get good ratings, but you can also gets sports a lot of other ways.  Howard has had value beyond his regular listeners because he is the poster boy for Sirius XM's marketing.  You can't get him anywhere else, and everyone knows who he is.  Even people who don't listen regularly to him, understand they have something exclusive.  Howard is valuable to Sirius XM like The Sopranos was valuable to HBO.  It was something unique you couldn't find on network television.  Howard was something you can't find on traditional radio, and that had a marketing value far beyond his number of daily listeners.  If you're buying a car, and decide to shell out extra money for a subscription radio, you want it to feel like you're getting something extra.  Howard was it.

Of course, the logic goes that there are a lot of other reasons to enjoy satellite radio, coverage, extra channels, extra sports, more music, etc.  But none of those are as clearly defining as Howard Stern.   The most simple proof of this was the fact that XM started out with a much larger subscriber base than Sirius, yet Sirius rapidly grew every year until XM was forced to merge with it.  Howard Stern was the sole completive advantage Sirius had, and it worked.  Even people who didn't listen regularly, liked the idea that they had something special.

If Howard leaves, it's quite likely all three million of his regular listeners will quickly jump ship, just to support him.  And it's also quite likely millions more will gradually start to leave, because satellite radio won't seem quite as special without him on it.

But it gets worse.  If the issue was simply Howard leaving satellite to go back to traditional broadcast, Sirius might just lose 3 million quickly and a few million more over the years.  But the problem is that the real competition for satellite radio is no longer traditional broadcast, but car equipped internet service.   

Sirius XM CEO Mel Karmazin has been smart enough not to say anything about the Stern negotiations publicly, for fear of pissing Howard off, but he did unconvincingly attempt to dismiss the serious threat of internet radio in a recent interview.

His argument, which is thin, is that internet radio either would have to charge a subscription, so it would be the same as paying for satellite or it would have to be ad supported, which would make it the same as traditional broadcast.  There are more holes than I care to comment on in this argument, but the biggest immediate one is… Howard Stern.

Howard has already proven that he can move millions of his listeners to any medium he wishes, and if he moves to internet radio, it would overnight become a big option.  Beyond the millions of subscribers who would leave Sirius for either ad supported or subscription options, the PR damage to Sirius XM would be enormous.  Howard Stern would be saying satellite is over, internet radio is the wave of the future.  The impact of that, could be something that would go beyond hurting Sirius XM.

It might eventually shut them down for good.

Friday, February 19, 2010

The Business of Howard Stern According to the Wall Street Journal

Excellent piece in the Wall Street Journal on Howard Stern's options going into his new contract negotiations with Sirius. Boy, the editorial page might be full of right wing nuts, but the WSJ really does good reporting. This is about the only real news story about the topic yet.

What's nice about the story is it doesn't pound on the same myths about Howard having to take a pay cut and it includes some real numbers to make it's points. Let's look at some of those key points:

1. Howard's original deal with Sirius was a big success for Sirius. As the WSJ reports, Sirius was a "fledgling" satellite radio company and desperately needed a big name to build the brand. Howard paid off big by bringing in millions of subscribers. The WSJ reports that Howard added 2 million subscribers. At $13 a month per subscriber that's $312 million in yearly revenue directly due to Howard, more than covering Howard's 100 million dollar a year salary and production costs. The 2 million number is actually conservative. It represents subscribers who got Sirius primarily for Howard. Sirius actually went from 300,000 subscribers before Howard announced he was going to it, to 8 million before it merged with XM. Many of the additional six million subscribers probably choose Sirius over XM because they wanted the opportunity to check out Howard. Moreover, without Howard, Sirius would have quickly collapsed. XM had better deals with automakers. So Howard kept them in business long enough to collect 8 million subscribers.

2. Most of Howard's Sirius fans ONLY listen to Howard. The WJS reports that 72% of Howard's listeners say they almost never switch off to other Sirius XM channels according to an independent research firm. This polling figure is not particularly accurate because it's targeted to self identified Howard Stern fans. Sirius XM's internal numbers indicate there is actually a very large percentage of casual Howard listeners among it's subscribers. (Many of wouldn't admit they were a Howard Stern "fan" on a poll.) Over 50% of Sirius XM subscribers occasionally check out Howard. However, among self identified Howard Stern fans, which number over 3 million subscribers listening daily, the majority simply listen to Howard and nothing else. So these people are very likely to cancel immediately if Howard doesn't return at the end of the year. That would be a massive blow to Sirius revenue. $300 million plus revenue could disappear overnight. And Sirius can't "afford" to pay Howard a $100 million a year?

3. Howard has many options other than Sirius, including television and film where he has already had success as a star and a producer. He could also return to traditional radio or shake things up by moving to the internet where his pirated shows already bring him millions of additional fans. What WSJ doesn't say is that Howard has the option of doing all of this at the same time. He could have a censored show on traditional broadcast and a uncensored show as an internet podcast. He could make money both with subscribers and from ad sales. It isn't hard to put together a very plausible business plan that could make him even more than 100 million a year by building a network outside of Sirius.

My one quibble with the story is that it repeats the myth that Howard has less wide exposure than he used to when he was on traditional radio. The fact is, the number of world wide daily Howard Stern listeners, when you combine Sirius satellite, internet and pirated internet, is larger than it ever was. It's only in New York and Los Angeles, and a few key cities, where there number of daily listeners has been smaller because Howard isn't on the major stations. The great thing about satellite radio is that it has made Howard available from coast to coast, where before he was limited to pockets of the country. Because New York and Los Angeles are where the media industry lives, it might seem like he has less exposure. But in the midwest, and around the world, new fans are able to tune in and the old fans can listen for longer.

One of the sticking points of Howard's current deal is that he doesn't allow Sirius to broadcast him on it's iPhone app. If the new deal allows for that, Howard's fan base could increase over night by another couple million. And now with the merger complete, if Howard put his considerable PR skills into really promoting Sirius/XM like he did when he first signed up, the exposure could bring million's more to the subscriber base.

Wednesday, February 10, 2010

Howard Stern "Pimp of All Media"

So Howard Stern has once again shown that he can make the entire news media machine his bitch anytime he likes. American Idol is back on the air, and what's the top story in regard to it? Howard Stern. Not Simon leaving, not Ellen joining, but Howard Stern. This is just one of about a billions blog posts and there are thousands more mentions on radio and television:

With his contract coming up for renegotiation, Howard Stern decided to pull out his favorite bitch, the American mass news media, and rough her up a little, bend her over and fuck her from behind until she begs for more. You see, the news media was getting a little uppity, saying Howard wasn't water cooler news anymore, so Howard bitch slapped her, ripped off her clothes and got her on her knees.

Obviously, it's a very dysfunctional relationship. The news media clearly suffers from low self-esteem. It would really rather cover how nice Ellen is, but that doesn't really satisfy it's darker desires. No matter how much Howard abuses the news, it keeps coming back for more of his attention. It's really kind of sad, but as pimps often say, pimps don't make whores, whores make themselves and choose their pimps.

The media is a whore. And Howard is their favorite pimp. And they love it rough. So Howard has shown them whose boss, and sent them back on the street to earn for him.

They're going to bring back Howard a new contract worth a ton of money. Howard doesn't care if it's from Sirius, traditional radio, or American Idol. He just wants the bitch to bring him his money.

Friday, February 5, 2010

Howard Stern Offered $100 Million to Join American Idol

So if further proof wasn't needed about Howard Stern's value and multiple options if he decides to leave Sirius, he's been offered a multi-million dollar deal to join American Idol as a judge.

Howard could also get millions to take a movie roll, start in a reality series, headline a sitcom or just about anything else Hollywood produces. What's interesting about the Idol offer, is with a little juggling, Howard could take it, and still do Sirius.

The truth is, Howard probably doesn't want to work so hard and he really seems to be happy doing his show on Sirius. So the real issue is how much can Sirius pay to keep him happy? My guess is, it will be close to, if not larger than his original deal with them.

So much for the rumors of a big Howard Stern pay cut!

Thursday, February 4, 2010

A Shrinking Market Needs Howard Stern to Unshrink

So here's another piece on the Howard Stern Sirius negotiations:

It tries a little harder to pretend it's doing real reporting, but it's still full of holes. For example it says "Although there is still tons of money in traditional radio, it's a shrinking industry…"

It's a shrinking industry in part because Howard Stern left. And if Howard Stern came back, the market would expand. Like it did when Howard expanded Sirius from a listener base of less that 600,000 to over 8 million (and then sucked up XM to 18 million and counting) in a few short years.

If Howard returned to traditional radio, the stations he was on would see huge ratings increases. That means more money from advertising, and more money to pay Howard. The math is simple.