CBS SAYS HOWARD STERN'S CHATTER WAS AD TIME

What Everyone Is Talking About Today

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NEW YORK (AdAge.com) -- Leslie Moonves vs. Howard Stern. Mel Karmazin against his former employer. CBS vs. Sirius. Old media against new. Anyway you bill it, the $500 million lawsuit CBS dropped on Howard Stern is already shaping up to be the media world’s catfight of the century.

Photo: AP
Howard Stern
The suit, which was filed in New York state Supreme Court, also names Mr. Stern’s agent, Don Buchwald, and Sirius Satellite Radio. It focuses on a clause in Mr. Stern’s Sirius contract that said he and Mr. Buchwald would receive a bonus dose of Sirius shares if they helped drive a pre-set number of subscribers to the satellite radio company. Mr. Stern spent countless mornings talking about his new venture while still broadcasting on CBS, even though the company had forbid him from uttering the word “Sirius” on-air. During his rants, he replaced “Sirius” with the phrase “uh-uh.”

“By engaging in continuous promotion of Sirius on CBS Radio airtime without any payment by Sirius to CBS for these advertisements and by pocketing over $200 million dollars for his personal benefit, Stern misappropriated millions of dollars worth of CBS Radio airtime for his own financial benefit and the financial benefit of Don Buchwald, his agent, and Sirius in contravention of repeated directives by CBS Radio,” the lawsuit stated.

Earlier this year, Ad Age estimated Mr. Stern had reaped millions in free advertising for Sirius on Infinity Broadcasting, now renamed CBS Radio.

In the story, we estimated that Mr. Stern spent the first 40 minutes of his Oct. 20 radio broadcast plugging one of his new Sirius Satellite Radio channels, which -- at an inflated rate of $30,000 for a minute-long live read near the end of his terrestrial run -- was worth about $1.2 million in free ad time.

“For Infinity chief Joel Hollander, this was the ultimate public-relations dilemma,” we wrote. “Should he accept Mr. Stern badmouthing his radio station daily, while plugging future employer Sirius, or should he turn the shock jock loose and accept the loss of the massive ad revenue his show brings in for the Viacom-owned company?” We didn’t contemplate the third possibility: CBS could keep him on the air and then sue his pants off afterward.

The suit also acknowledges what has been a major sticking point between Mr. Stern and CBS: The archived tapes of his radio show. CBS claims they own the tapes, which has infuriated Mr. Stern.

Incidentally, we’re not sure if the CBS suit will hurt Mr. Stern any more than it’ll help him. He seems to escape his media troubles unscathed and often even more famous than he was before. Of course, we can’t say the same for Sirius. Its stock closed yesterday at $5.11 after dropping 2% on the news. Of course what’s more glaring is it’s down 30% from $7.46 on Dec. 12 -- four days before Mr. Stern exited CBS.

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