Stern fails to win $300M payday in Sirius suit
Tuesday, April 17, 2012
LOS ANGELES (AP) — Howard Stern’s hopes for a $300 million payday from Sirius XM Radio Inc. have been dashed by a judge. His show’s Twitter feed said the shock jock was “really bummed” by the decision and plans to appeal.
Stern sued last March, arguing that he was entitled to a huge stock-based bonus in his contract because the number of Sirius subscribers exceeded the company’s internal forecasts. But his initial job contract was signed in October 2004, well before Sirius acquired XM in July 2008.
New York state court judge Barbara Kapnick ruled Monday that Stern couldn’t count XM’s nearly 10 million subscribers in calculating his bonus, saying that the language of his contract was clear and unambiguous.
Kapnick dismissed Stern’s lawsuit “with prejudice,” which means he can’t bring another case based on the same set of facts.
Sirius XM’s stock rose 7 cents, or 3.2 percent, to close Tuesday at $2.24.
The ruling by New York’s trial court, the Supreme Court, was decisive and “finally removes lingering headline risk,” Standard & Poor’s equity analyst Tuna Amobi said in a research note. He has a “buy” rating on the shares.
Sirius XM, which now has more than 21 million subscribers, acknowledged the ruling in a securities filing Tuesday.
“The court found the agreement unambiguous and that we had complied with all our obligations,” it said.
Stern had already received a $75 million stock bonus for exceeding the 2006 subscriber estimate by more than 2 million subscribers. He was also paid $25 million when Sirius combined with XM, in order to enable Stern’s show to be broadcast to XM listeners as well.
Stern’s agent Don Buchwald, who stood to gain $30 million from a favorable ruling, did not immediately respond to a request for comment Tuesday. Buchwald also received a $7.5 million stock bonus when Stern exceeded the 2006 subscriber estimate and $2.5 million when Sirius acquired XM, the ruling said.
In December 2010, Stern signed a new 5-year contract, keeping him at Sirius XM through 2015.
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