For Infinity chief Joel Hollander, this was the ultimate public-relations dilemma: 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.
"You always look at the cost benefit," said Ben Drew, VP-corporate and public affairs of PR firm MS&L. "You identify what's most important to you. Is it bottom line? Or is it cutting off his forum?"
In this case it's quite a cost-yet quite a forum. Mr. Stern's schtick has always included attacking his employers from his broadcasting bully pulpit, but in recent weeks he's taken that to new heights. Not only has he continued to berate Tom Chiusano, the general manager of Mr. Stern's flagship station WKRX-FM, for cutting sales commissions, but he's blasted Infinity's much-hyped Jack format and forecast the demise of terrestrial radio. Not good for morale, but even more frustrating are Mr. Stern's incessant Sirius plugs-talking up his new channels and telling listeners how to purchase Sirius equipment and subscriptions.
`Take me off the air'
Consider: For the first 40 minutes of his radio show Oct. 20, the shock jock plugged one of his new Sirius Satellite Radio channels. Around 6:40, Mr. Chiusano asked him to cut the Sirius infomercial. But Sirius execs were likely already gloating. A minute-long live read on Mr. Stern's show across all of his markets goes for about $30,000, which means the 40-minute plug was worth about $1.2 million in free ad time. Said one Infinity insider: "Sirius needs him here in the fourth quarter more than we do."
As early as last April, Mr. Stern pleaded with Infinity to give him the boot. "I am begging Infinity, Viacom to take me off the air," he said. "Every day I do a good show, it reminds people to come to satellite radio." It is, of course, highly unusual for a broadcast company to keep a personality on the air after a resignation.
"Usually it's a summary execution-clean out your desk, turn off your mic, you're gone," said Lou Colasuonno, senior VP at communications firm Financial Dynamics. "It's dangerous to have a disgruntled employee who's got direct access to the public ... but the pain they suffer from his slings and arrows will be soothed by the cash flow he's producing for them."
Citadel Broadcasting Corp., for example, got fed up early. It yanked Mr. Stern's show off four of its stations last January because he was too heavily promoting Sirius on the air, CEO Farid Suleman said at the time. (Mr. Suleman didn't comment for this article.) But while Mr. Stern was only on four Citadel stations, replacing him on his 27 Infinity stations is a much taller task; Mr. Hollander has used the better part of a year preparing for Mr. Stern's absence.
Infinity wouldn't talk publicly about the show's content but privately some within the company have expressed their frustration. "I don't think [top management] is happy, but they're not going to say goodbye any quicker as a result," said one sales executive.
The big question is whether the money he brings in during his final days outweighs Sirius's long-term threat. During the fourth quarter Mr. Stern's show has been commanding ad rates two to three times higher than normal, largely due to the expectation that he'll never reach this large an audience again. (His cume in the New York metro area, where he nabs about 6% of the total radio audience, is just under a million; Sirius, meanwhile, has 2.17 million subscribers.)
And while the shock jock himself is doing more for satellite radio than any agency ever could, Sirius last week tapped Euro RSCG, New York, to hype its pair of Howard Stern channels. The appointment of Euro brings together a cadre of friends, as the agency's CEO Ron Berger is tight with Dan Klores, who has represented Mr. Stern off and on for years and currently counts Sirius as a client.
A twist in the tale: Mr. Stern's on-air exuberance about Sirius could also come back to haunt him. According to the latest Arbitron numbers, his show has dropped listeners in several key markets-it's down 10% in New York, 15% in Los Angeles, 18% in Chicago and 28% in Washington.
Part of that, surmises Mr. Colasuonno, a former New York Daily News editor, could be an audience's tiring of all the talk about Sirius. "Sometimes media people get lost and overestimate the appetite viewers and readers have for issues that are personally important to themselves."
Of course, as long as Mr. Stern plays the martyr he's practiced for so long against Michael Powell and the FCC, it'll be difficult to make any changes that give him fuel.
"You don't want to do anything that's going to exacerbate the situation," Mr. Drew said. "You risk creating a larger media story if you take him off the air and end the contract early rather than letting it end."