Can Howard Stern rescue Sirius, or can a merger with XM Radio?


So, in a little over eight months what has Howard Stern -- the King of all Media -- done for Sirius Satellite Radio? The famous shock jock moved from the public airwaves of CBS to the privately-owned and subscription-only Sirius Radio network in January of 2006, taking a $500 million multi-year contract with him for himself and the crew he operates with (Hi Robin!).

But let's pull out the measuring stick and see if Stern has been worth it, although a direct measurement can't really be made. After all, would newer Sirius subscribers have signed up for Sirius if Stern had not moved over? That is the question we can all speculate on, but nobody can definitively answer, although some marketing statisticians have tried.

Sirius has gained customers this year, no doubt about it. Even Mad Money's Jim Cramer calls SIRI stock a "buy" at $4. But there are rumors all over that the overall disappointing performance of Sirius and larger competitor XM Radio might force the two companies to make a deal and merge their networks. Cramer says this would spike SIRI shares to $10 or more. It very well could. Both companies are unprofitable so far (as expected, launching satellites is not cheap), and a merger could eliminate tons of financial redundancies and other factors.

Even as Stern has more than likely brought legions of his fans to the Sirius network in the last eight months, it will take more than the arguable most-popular show host on radio these days to rescue Sirius from mounds of debt and impatient institutional shareholders, who are ready to try and recoup some investment. It's true that it takes time to make a profit after launching satellites (at a cost of hundreds of millions) and facing huge costs up front.

Then you have to spend hundreds of millions of dollars on customer rebates to hit price points and marketing costs (like Stern) to drudge up a loyal fan base that will pony up $13 a month to help you pay all that debt off. That's apparently not happening fast enough, even with Stern's recruits onboard.

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