Friday, September 29, 2006

Inside Radio and NAB's BOGUS Number

September 29, 2006

In their "talking points" numbers the NAB puts out costs, losses, etc. They also include their version of the Howard Stern deal.......and quote bad information.

The NAB states that the Stern contract total is $720,000,000. Why do they do this. Simply stated, they were TOO LAZY, or TOO IRRESPONSIBLE to do a few point and clicks on a website to find out what the REAL DEAL was.. They simply took $500,000,000 and tacked on the stock that was valued at $220,000,000. The result is that the NAB has OVERSTATED the Howard Stern deal by $110,000,000 or over 18%!!!!!

The REAL Deal is as follows

1. The deal is roughly $390,000,000 in cash over 5 years and 34,375,000 shares to be paid if certain pre-determined subscriber goals were reached. At the time of issue the shares were worth roughly $220,000,000. This put the value of the deal at about $610,000,000. Sterns Cash payments total about $78,000,000 per year for the length of the deal.

2. Details of the transaction can be viewed at http://www.shareholder.com/Sirius/edgar.cfm Click on the 8k form filed January 5, 2006.

3. The shares were not a bonus. They were clearly identified as part of the base contract. The SEC filing states, "....Pursuant to our October 2004 agreement with Stern, we agreed to deliver these shares in December 2010, or earlier if as of the end of any fiscal year we exceeded agreed upon subscriber targets. Our December 31, 2005 subscriber total exceeded the subscriber target we agreed upon with Stern in October 2004."

4. The Howard Stern deal encompasses all of the talent, staff and programming on the Howard Stern streams. Shows such as Bubba The Love Sponge, Scott Ferrall, Howard 100 News, the staff, etc. Are all part of the deal.

5. Sirius has stated that Stern can earn additional revenue, but stated that any additional revenue is tied to substantial targets.

So, given this information, perhaps Inside Radio and the NAB will now publish a retraction. Somehow I doubt it though........They are to busy trying to line up 8 hours of commercials for each station.

9/29/2006 11:13:00 AM

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