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Karmazin: Stern Effect on Sirius ‘Dramatic’

Karmazin: Stern Effect on Sirius ‘Dramatic’

Speaking to a Citigroup conference of investors this week, Sirius CEO Mel Karmazin explained the reasoning behind Howard Stern’s stock deal.
Stern began performing his morning show at the satcaster this week and produces two additional channels for Sirius. Karmazin said the company is adding salespeople this year, who can sell ads on Stern across all dayparts.
Stern and his agent, Don Buchwald, this week received 34.4 million shares of Sirius stock, valued at about $220 million. The stock was part of an original 5-year, $500 million cash-and-stock agreement. The value of the stock doubled, Karmazin said.
Why turn over the shares now? Because the company hit agreed-upon subscriber targets, bringing in 1.14 million new subscribers in the fourth quarter of 2005, with over 3.3 million as of this week, noted the CEO.
“We think that what Howard has done for Sirius has been dramatic. Our awareness is significantly higher than our competitor. Revenues being estimated by the street for 2006 for Sirius are $200 million higher than they were before Howard.”