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Old 11-30-2006, 06:59 PM   #31
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stern may be responsible for getting them out of the mudhole they were stuck in but the 600m they are paying him is also the reason for some of their financial problems today. if they are unable to sustain their growth rate the 600m they spent on stern is going to be sorely missed.
OH Yeah, they just whipped out the check book and wrote him a 600 million dollar check the first day he got there. This money is over a 5 year period. Again you totally misrepresent for your own purpose to try to make SIRIUS look so bad.
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Old 11-30-2006, 07:09 PM   #32
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Little do the anti-Sirius and Stern bashers ever note that the number of subs he has brought onboard already paid for his first installment and then some!!
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Old 11-30-2006, 08:46 PM   #33
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OH Yeah, they just whipped out the check book and wrote him a 600 million dollar check the first day he got there. This money is over a 5 year period. Again you totally misrepresent for your own purpose to try to make SIRIUS look so bad.
i didnt misrepresent _ANYTHING_. maybe you mised the phrase "are paying him".

i stated the fact that they are paying him $600 million (and it is true that a significant portion of that is up front pmt in fact before he ever worked a single day at siri) and that that $600 mil. is a lot of money that could be used for other things.

not every one agrees that howard stern was a smart acquisition for siri. i agree most of you do believe that but if a person looks analytically at it it is very hard to justify the expenditure. i often see commentators claiming it was obviously a good decision and the only thing obvious is they havent thought very hard about it.
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Old 11-30-2006, 08:48 PM   #34
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Little do the anti-Sirius and Stern bashers ever note that the number of subs he has brought onboard already paid for his first installment and then some!!
saying this and backing it with actual figures are two different things. would you care to show your work?
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Old 11-30-2006, 09:30 PM   #35
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Originally Posted by FlagRiot
not every one agrees that howard stern was a smart acquisition for siri. i agree most of you do believe that but if a person looks analytically at it it is very hard to justify the expenditure. i often see commentators claiming it was obviously a good decision and the only thing obvious is they havent thought very hard about it.
You know I've been reading your drivel for weeks now about this and you've yet to convince me or anyone else that I am aware of that you are right. Is this really all you have is to just keep repeating it until someone begins to believe it? Where are your facts to show your right? Would you care to give some real details specifics and not just your anti-sirius propaganda? We all know you are pro-XM, I mean you'd have to blind not to see that. So how about some facts instead of generalities... I mean it is you that keeps saying the rest of us are wrong, so I say its time to put up or shut up! Give us the specific facts to back up your claim that they can't justify this expense and that this was a bad decision for SIRIUS.
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Old 11-30-2006, 10:58 PM   #36
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Give us the specific facts to back up your claim that they can't justify this expense and that this was a bad decision for SIRIUS.
I would not be surprised to see it used as a Policy case in MBA programs around the country one day it could even be the topic of entire books.

The 5-year expense for the contract (based on what we know at this time) is over $600M -- $120M/year. Giving them the benefit of doubt, siri could average 10 million subs over that period -- which amounts to $12/sub/year. At an ARPU of $11, those 10M subs bring in 1.32 billion/yr. Over the life of the Stern contract they will have paid him at least 9% of gross revenue, and probably more like about 10.0-10.5%.

Can you name another publicly held business that gives 10% of its revenue stream to one entertainer? Could be one, but I don't think so. Why? Howard is the best entertainer on earth? Hardly.

no other company would have done it. Mel wouldnnt have done it - he as much as said so before he had to defend the action (ie before he was hired by siri).

the most interesting part of the deal is that stern was wanting to leave terrestrial, xmsr wouldnt give him more than maybe 25m/yr, and still stern managed to get 120m out of clayton. sheer stupidity and no accident clayton was fired a couple months later - the board surely approved it but major stockholders reacted violently. apparently.

anyway, thats all beside the point. siri gave 10% of the company revenue to one guy for a 5 year deal. thats not so bad, right? consider that during this same 5 yr period siris cost to add a subscriber will average something like $140 and that siri has determined the avg life of a subscriber is about 3 yrs.

you can see that nearly half of each subs gross revenue goes to pay for stern and the cost to acquire the sub. another 1/3 goes to pay royalties cust care and other costs that vary directly with the # of subs. what i'm saying is that youve spent 80-85% of the stern revenue generated just to get them signed up and provide stern as well as basic services to them.

so the question is whether the 17% of stern revenue that could become fixed cost contribution margin is worth the gamble they took in hiring him. i guess you say yes and i say no. i can say this -- it does not leave much of a margin for error. if stern subs dry up (which apparently is happening) and siri is stuck with this massive nut for the next 4 yrs not nearly so many people will be willing to declare stern a success as there are today.

you cant always evaluate a 5yr contract at the end of one year and make sense of it. we dont know all the costs of the contract and we dont know whether stern will draw anymore subs or not. for that matter, we dont know that he wont produce a dixie chicks moment which is actually _harmful_ to siris sub #s. you just dont know until the contract is up. and you dont know that stern wont pick up and move to xmsr 4 yrs from now or even back to terrestrial (or retire) leaving siri with a tremendous investment in a brand that just walks away on 12/31/10.

This can be argued on both sides but from an analytical standpoint the argument in favor of paying stern $600m for 5 yrs cannot be sustained imho.
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Old 11-30-2006, 11:41 PM   #37
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Originally Posted by FlagRiot
i didnt misrepresent _ANYTHING_. maybe you mised the phrase "are paying him".

i stated the fact that they are paying him $600 million (and it is true that a significant portion of that is up front pmt in fact before he ever worked a single day at siri) and that that $600 mil. is a lot of money that could be used for other things.

not every one agrees that howard stern was a smart acquisition for siri. i agree most of you do believe that but if a person looks analytically at it it is very hard to justify the expenditure. i often see commentators claiming it was obviously a good decision and the only thing obvious is they havent thought very hard about it.
I believe that they could have paid less, but sometimes people overpay for the best.

Now, if you were going to spend $600 mil on a radio personality and his crew, who else would you have picked, other than Howard Stern? Who else would have an influence as big as his when it would come to picking a SatRad provider? Nobody. Obviously since Stern arrived, so did more market share. That will continue, until the end of 2010 -or whenever he leaves. Lots of people will continue choosing the popular Satellite Radio with Howard Stern, than the one without Howard Stern (even people who don't even like him, lol).
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Old 12-01-2006, 12:24 AM   #38
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so the question is whether the 17% of stern revenue that could become fixed cost contribution margin is worth the gamble they took in hiring him. i guess you say yes and i say no.

you cant always evaluate a 5yr contract at the end of one year and make sense of it. we dont know all the costs of the contract and we dont know whether stern will draw anymore subs or not. for that matter, we dont know that he wont produce a dixie chicks moment which is actually _harmful_ to siris sub #s. you just dont know until the contract is up. and you dont know that stern wont pick up and move to xmsr 4 yrs from now or even back to terrestrial (or retire) leaving siri with a tremendous investment in a brand that just walks away on 12/31/10.
I do indeed say YES, because I and many others feel it is a great possibility that without the brand recognition and publicity that SIRIUS got from this deal put them on the map period. I believe that SIRIUS would have already gone under without Stern. 600,000 subs and they grew to 5.1 million in one year. Mel has already said on several shows they feel they got their money's worth and that Stern has paid for himself.

The on thing clear about your post is that you do an awful lot of speculating and clearly you don't have all the facts, but no one does but SIRIUS. The only thing I agree with you about is the fact that you can't really know for sure if this investment was worth it until the end of the contract, yet in the next breath you say just the opposite you've already drawn the conclusion that it wasn't. So which is it? You seem to be talking out of both sides of your mouth. I am no more convinced now before you gave all these speculative details than I was when you were generalizing. All you really have is speculation and general numbers that you think are right.
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Old 12-01-2006, 09:16 AM   #39
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Default Stern

I dont think any thnks brining Stern aboard was a bad thing. SPending double what you competition was offerring was an act of deseperation that had to to made. We will know the whole story in a year or two if it was a success.
By the way as much as I hate Rush Limbagh he would be worth signifigantly more money then Mr. Stern. Maybe even $600,000,000 plus a bunch of stock<g>
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Old 12-01-2006, 09:50 AM   #40
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Never again will another radio personality receive the kind of deal stern did. Not even Stern. someone called it desperation and thats what it was.

a lot of people would argue that siris recent success has had more to do with the replacing of joe clayton w/ mel k. than it had to do with stern. stern is a drain on siris assets while mel k. has reformed siris mgmt into something that can work.

whether they can find their way thru the fog clayton left them in is another question.
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Old 12-01-2006, 09:58 AM   #41
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Quote:
Originally Posted by FlagRiot
i didnt misrepresent _ANYTHING_. maybe you mised the phrase "are paying him".

i stated the fact that they are paying him $600 million (and it is true that a significant portion of that is up front pmt in fact before he ever worked a single day at siri) and that that $600 mil. is a lot of money that could be used for other things.

not every one agrees that howard stern was a smart acquisition for siri. i agree most of you do believe that but if a person looks analytically at it it is very hard to justify the expenditure. i often see commentators claiming it was obviously a good decision and the only thing obvious is they havent thought very hard about it.
SIR. YOU ARE INCORRECT. They came up with $500M based on THE SUBSCRIPTIONS HE WAS GOING TO BRING.

Here's the problem with sleeping through school. You miss reality.

He sat down with Sirius and they came up with a WORST CASE SCENARIO with how many people would follow him JUST CAUSE. I can IMAGINE that number was 1MILLION MINIMUM.

That was when they had 500K subs. NOW THEY HAVE 5.5MILLION IN UNDER A YEAR.

THEY DIDN'T HAVE $500MILLION TO INVEST IN OTHER THINGS. STERN FREED UP THIS MONEY WHEN HE SIGNED. THE END.

There was no money until he signed.

BTW 1MILLION subs TIMES $12 TIMES 60months is $720MILLION DOLLARS.

And that's only with 1MILLION SUBS.

Learn to do math, then move on. If SIRIUS is having a CASH FLOW PROBLEM, it's NOT due to STERN.
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Old 12-01-2006, 11:00 AM   #42
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SIR. YOU ARE INCORRECT. They came up with $500M based on THE SUBSCRIPTIONS HE WAS GOING TO BRING.
This is a ridiculous statement; obviously, negotiating isnt your strong suit.

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He sat down with Sirius and they came up with a WORST CASE SCENARIO with how many people would follow him JUST CAUSE. I can IMAGINE that number was 1MILLION MINIMUM.
You are making these statements that are utterly unsupportable. Sheer speculation and you people accuse ME of that?

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That was when they had 500K subs. NOW THEY HAVE 5.5MILLION IN UNDER A YEAR.
They had 600k subs when Stern was hired 2 yrs ago. They had just spent hundreds of millions on nfl and have since spent hundreds of millions on nba, nascar, elvis, martha stewart, baabwa-wahwah, and tons of other expenditures for so-called "content". yet, it is all about stern. if so, they need to get rid of the other 3/4 billion in content commitments.

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THEY DIDN'T HAVE $500MILLION TO INVEST IN OTHER THINGS. STERN FREED UP THIS MONEY WHEN HE SIGNED. THE END.

There was no money until he signed.
i'm sorry but this is so typical of the sirius shareholder mentality. not the slightest idea that sirius is losing over a billion dollars this year and continuing the bleed cash.

Quote:
BTW 1MILLION subs TIMES $12 TIMES 60months is $720MILLION DOLLARS. And that's only with 1MILLION SUBS.
BTW that has nothing to do with making money.

Quote:
Learn to do math, then move on. If SIRIUS is having a CASH FLOW PROBLEM, it's NOT due to STERN.
it is a fact they paid most of the '06 stern expense in SHARES. but it is obvious from your post you have no concept whatsoever of the financial aspects of siris business.
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Old 12-01-2006, 12:13 PM   #43
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If the stock sinks to $2.50, BUY!

Long-term outlook is bright! Twenty million subscribers. People are fed up with conventional radio. Sirius will eventually make money, buy back stock, and retire debt. It will take a few years, however.
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Old 12-01-2006, 12:45 PM   #44
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Default Everyone is missing the point

Recently they stated they are making $20 million a month. No one has included the revenue from the advertisers on Stern's show and other talk shows. Also if you look back at the dot com era they made money but really didn't but a lot of people got rich then the companies folded. So just because the stock is down doesn't mean that the company is not making money. It just means it is not making enough to pay the stockholders. Anyone that has spent time dabbling in the stock market would understand this. You would need to understand this in order to learn to "play" the stock market well and to make money. Sometimes companies lose money and the stocks go up and sometimes they make money and the stocks go down. Generally, it works the way you would expect it to, companies make money and the stock goes up and companies lose money and the stocks go down but this is not always the case.

As for how much Stern makes and how big a draw he might be is subjective but if you followed his career you would know that if he wasn't worth it then they would not have offered him the deal. Compare this to Oprah Winfrey who XM is paying $6 million for and she only appears once a week for 30 minutes and her "friends" fill out the rest of the time. How is that justifiable and why is XM doing this? Because they are losing money to Sirius because of Stern. You also forget that he is also doing programming on another channel and that is drawing subscribers with that as well. He is a very creative person and if you followed his career and read his books you would see how hard he worked to get where he is. You would see how he innovated talk radio and how many people imitate him then claim to have never heard of him. Before he came to satellite radio, his was the biggest and only syndicated show that got paid for every market he went into. Also he was the highest rated syndicated radio show in every market he went into. So saying he isn't worth the money they are paying him shows that those people don't know his history and how he came to the top from nothing to become one of the most well known radio personalities.
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Old 12-01-2006, 03:58 PM   #45
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Recently they stated they are making $20 million a month. No one has included the revenue from the advertisers on Stern's show and other talk shows. Also if you look back at the dot com era they made money but really didn't but a lot of people got rich then the companies folded. So just because the stock is down doesn't mean that the company is not making money. It just means it is not making enough to pay the stockholders. Anyone that has spent time dabbling in the stock market would understand this.
WHO is making 20 million a month? what in the world are you talking about?

siri? siri is LOSING, not MAKINg, and the amount is estimated at $100m/month. counting the stern ad revenue and everythign else.

if you dont know this and youre 'dabbling' in siri then 'dabbling' is an overstatement of what youre doing.

Quote:
You would need to understand this in order to learn to "play" the stock market well and to make money. Sometimes companies lose money and the stocks go up and sometimes they make money and the stocks go down. Generally, it works the way you would expect it to, companies make money and the stock goes up and companies lose money and the stocks go down but this is not always the case.
lol.

Quote:
As for how much Stern makes and how big a draw he might be is subjective but if you followed his career you would know that if he wasn't worth it then they would not have offered him the deal. Compare this to Oprah Winfrey who XM is paying $6 million for and she only appears once a week for 30 minutes and her "friends" fill out the rest of the time. How is that justifiable and why is XM doing this? Because they are losing money to Sirius because of Stern. You also forget that he is also doing programming on another channel and that is drawing subscribers with that as well. He is a very creative person and if you followed his career and read his books you would see how hard he worked to get where he is. You would see how he innovated talk radio and how many people imitate him then claim to have never heard of him. Before he came to satellite radio, his was the biggest and only syndicated show that got paid for every market he went into. Also he was the highest rated syndicated radio show in every market he went into. So saying he isn't worth the money they are paying him shows that those people don't know his history and how he came to the top from nothing to become one of the most well known radio personalities.
you guys have really done your homework around here.
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