On October 6, 2004, Stern announced on his show that he had signed a five year contract with Sirius, a satellite radio service. Sirius provided a budget of $500 million to pay Howard, his staff and general production costs. His personal salary has not been revealed. Other media sources have claimed that Stern netted a $225 million one-time stoc
k bonus for meeting subscriber quotas, which he did meet in January 2006.
Stern stated that he was growing increasingly unhappy doing his show on terrestrial radio. The combined stresses of heavy censorship and editing by management as well as lengthy commercial breaks weighed into his decision to start anew on Sirius. Stern admitted to feeling dead inside, creatively in December, 2005 while still on terrestrial radio.
The Sirius deal, which took effect on January 1, 2006, enabled Stern to broadcast his show without the content restrictions imposed by the FCC. Moreover, the deal also enabled Stern to program an additional Sirius channel.
On February 28, 2006, CBS Radio announced it had filed a lawsuit against Stern, his agent Don Buchwald, and Sirius Satellite Radio, saying Stern used CBSs airwaves to unfairly promote the satellite service and enrich himself. The lawsuit also claims that Stern repeatedly and willfully breached his contract with CBS, misappropriated millions
of dollars worth of & airtime for his own benefit, and fraudulently concealed his performance-related interests in Sirius stock. The suit, filed in New York state court, sought compensatory and punitive damages. Not to be outdone, Stern earlier in the day (prior to CBSs announcement) held a press conference at which he mentioned that CBS added
to the media attention, booking him for appearances on Late Show with David Letterman and its news magazine show 60 Minutes. I made them millions of dollars. If I was hurting them, why did they keep me on the air for 14 months? Stern said. How can you have it both ways?
Leslie Moonves, the President and Chief Executive Officer of CBS Corporation, appeared on one of Sterns final shows to compliment him on his move to Sirius and thank him for the record advertising revenue the network sold. Moonves told Stern that he bought Sirius stock. Stern said the network had the option to push the button on his program, tak
ing him off the air, if they did not agree with what he was presenting to the public.
On May 11, 2006, CBS said it was near settling the lawsuit with Stern. We have an agreement, but there are details that have to be worked out, said CBS lawyer Irvin Nathan. Some details of the agreement were officially announced May 26.
As a result of the CBS lawsuit settlement, Stern announced on June 7, 2006 that Sirius gained exclusive rights to his entire back catalog of radio shows from his days at CBS (about 23,000 hours). The shows cost Sirius approximately $2 million, which equates to approximately $87 per hour of tape. Sirius has the rights to the tapes until the end of S
terns current contract with Sirius, and then all ownership rights will return to Stern.