Stern goes to satellite broadcasts from FM

NEW YORK -- Howard Stern has long had two words for the Federal Communications Commission -- and in 15 months, he can finally utter them on the air.

The self-proclaimed "King of All Media," perhaps the most influential radio voice of the last 20 years, is shifting his salacious act to satellite radio and freeing himself from the increasingly harsh glare of federal regulators. His new employer, Sirius Satellite Radio Inc., is gambling its new star can rescue a company that's lost $1 billion over the last five years.

In an announcement Wednesday ripping the FCC and media conglomerate Clear Channel Communications Inc., Stern told his loyal audience of 12 million that he was abandoning traditional broadcasting. His debut on Sirius will come in January 2006, after Stern finishes the rest of his current deal with Infinity Broadcasting Corp., the radio subsidiary of MTV owner Viacom Inc.

"I'm tired of the censorship," said Stern, who was involved in the two biggest radio fines ever imposed by the FCC -- including a record $1.75 million settlement reached four months ago. "The FCC ... has stopped me from doing business."

Stern signed a five-year, multimillion dollar deal with Sirius, according to the company. Stern, along with airing his own morning show, will program two additional channels for the company as part of the "reinvention" of a 25-year career that spawned scores of imitators.

"This starts the avalanche," Stern said later in an interview. "One of radio's highest earners, one of its innovators, is kissing terrestrial radio goodbye."

Under his new deal inked Monday, Stern -- along with a cast of cohorts who will accompany him to Sirius -- will reach every market nationwide. His show dominates the lucrative radio market among males 18 to 49 years of age and ranks No. 1 in many of the 46 markets where his show is broadcast.

Stern price tag

The price tag for luring Stern to satellite, including salaries, overhead and other costs, will hit $100 million a year. But Sirius, which now has more than 600,000 subscribers, hopes Stern can bring along up to 4 million new recruits and catapult its business into the black. They said they'd need at least 1 million to cover the costs of signing Stern.

It might work. Shares of the satellite radio company surged nearly 16 percent on word of Stern's defection.

If Stern pulls it off, his signing could become the broadcasting equivalent of the old American Football League's contract in the 1960s with quarterback Joe Namath, which provided the fledgling league with an undeniable superstar and instant credibility.

Sirius is one of two companies trying to make satellite radio a viable business. Its competition, XM Satellite Radio Holdings, launched its own marketing weapon this week: shock jocks Opie and Anthony, who were yanked off the air for broadcasting two listeners having sex inside St. Patrick's Cathedral.

Stern's show will air as part of Sirius' basic package, rather than as a premium channel. Sirius offers 120 channels of commercial-free music, sports, news, talk, entertainment and traffic for a monthly fee of $12.95. Customers do not need a dish to receive the radio signal; it's picked up by a receiver about the size of a car radio. There's a one-time fee of $15 to start the service, and the equipment can cost up to $150.

"Satellite radio is going to take its place as a mainstream force, and it may surpass AM and FM," said Michael Harrison of the trade publication Talkers. "Howard Stern is a catalyst who is only making the process faster." Stern couldn't agree more. Along the way, the shock jock said he wouldn't mind putting a hurting on Clear Channel, which remains embroiled in lawsuits with Stern over its decision to drop the him earlier this year from half-dozen of its stations.

"My dream is going to satellite, and making Clear Channel's $85 million radio properties worth 50 cents," Stern said. "I hope it comes true." In July, Clear Channel sued Infinity for more than $3 million, claiming Stern broke their contract by violating federal indecency regulations. The lawsuit came after Stern filed a $10 million suit against Clear Channel, the nation's top radio station owner, which had $8.9 billion in revenues last year.

Like cable television, satellite radio is not subject to federal indecency scrutiny because it is available only to paid subscribers.

The FCC declined to comment on Stern. Clear Channel did not immediately return calls about Stern's comments. The American Family Association, a longtime critic of Stern, said his decision to join Sirius accomplished the near-impossible task of pleasing both their group and the shock jock.

"He should be happy, and we're happy he's off the publicly owned airwaves," said Randy Sharp, AFA director of special projects. "Quite frankly, we hope one day he sees the error of his ways and reforms his message to America." Shares of Sirius rose 52 cents to close at $3.87 on the Nasdaq Stock Market, where shares of XM Satellite fell 48 cents to close at $29, after falling as much as 6 percent earlier in the day. Viacom shares rose 32 cents to close at $35.77 on the New York Stock Exchange.