Shock jock sues Sirius

Howard Stern and his agent are
suing satellite radio provider Sirius XM Radio Inc for refusing to award the
performance-based stock options it had promised the radio shock jock.

In a filing with the Supreme Court
of the state of New York, Stern’s lawyers say the satellite radio company
offered Stern a series of escalating stock awards in 2004 that hinged on it
beating its subscriber estimates by 2 million or more in any year of Stern’s contract.

The complaint said that Stern helped
the company surpass its targets by more than 2 million subscribers in 2006 and
2007.

 After Sirius’ merger with XM in 2008, Sirius
XM again beat its targets, as well as in 2009 and 2010, according to the filing.

“Now that Sirius has conquered
its chief competitor and acquired more than 20 million subscribers, it has
reneged on its commitment to Stern, unilaterally deciding that it has paid him
enough,” the complaint said.

In response, Sirius XM said it had
“met all of our obligations under the terms of our 2004 agreement with
Howard, his agent and production company.” It added it was “surprised
and disappointed” by the legal action.

Stern’s production company, One
Twelve, was paid stock awards only in the first year of Stern’s contract.

Sirius XM also was supposed to pay
Stern’s agent, Don Buchwald, a consulting fee of 10 per cent, the court
documents showed.

In December, Sirius XM struck a new
contract with Stern that will have the host on air at least until 2015.

Stern’s previous contract was a
five-year $500 million deal but terms of the new contract were undisclosed.

The satellite radio company has
been steadily adding subscribers and distancing itself from years of huge
losses and concerns about its business model.

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