Big Dick McGee
If you don't know, now ya know
Today, the WSJ interviewed Mel Karmazin about the state of Sirius satellite radio. I don't know how the hell Sirius will ever be profitable, but Karmazin sunk $15M of his own money into the stock, so we'll see.
Invariably, the interviewer asked about the CBS lawsuit agains Sirius and Howard Stern. For those of you not familiar with this litigation, CBS radio is suing Stern and Sirius for $500M. CBS claims that Howard used their airwaves to advertise a competitor without CBS being compensated. Not only did he give free advertising to a rival, CBS claims, but he in effect violated the non-compete clause in his contract with CBS.
I will admit that when I first heard of this, I assumed Howard Stern's version of the story was correct. That is, CBS has a vendetta against him, they're pissed that he left, etc.
However, the WSJ interview brought some information to light that I was not aware of. In their SEC filings, Sirius did not mention a clause Stern had inserted in his contract, whereby he would be rewarded based on the subscribers he added, even before he joined the company. Thus, it would behoove Stern to advertise Sirius heavily from the first day he signed the contract, as he would have a direct pecuniary interest in doing so.
I'm still trying to read the particulars of the case, but I am not an attorney, so some of it is just boilerplate filing. However, given the facts that Stern freely advertised a direct competitor to CBS while on their airwaves (and, let's be honest: just because he was to call Sirius "uh-uh-uh", doesn't change the fact that he was shilling for them), CBS received no compensation for said advertisement,and Stern himself directly benefitted from this advertisement in terms of dollars being added to his contract, I believe the CBS case has merit.
It will be up to a judge to decide, but I don't buy Stern's claim that CBS is being vindictive, particularly when Sirius "skirted" the law when making their 8k filing to the Securities and Exchange Commission.
Of course, it will be up to
Invariably, the interviewer asked about the CBS lawsuit agains Sirius and Howard Stern. For those of you not familiar with this litigation, CBS radio is suing Stern and Sirius for $500M. CBS claims that Howard used their airwaves to advertise a competitor without CBS being compensated. Not only did he give free advertising to a rival, CBS claims, but he in effect violated the non-compete clause in his contract with CBS.
I will admit that when I first heard of this, I assumed Howard Stern's version of the story was correct. That is, CBS has a vendetta against him, they're pissed that he left, etc.
However, the WSJ interview brought some information to light that I was not aware of. In their SEC filings, Sirius did not mention a clause Stern had inserted in his contract, whereby he would be rewarded based on the subscribers he added, even before he joined the company. Thus, it would behoove Stern to advertise Sirius heavily from the first day he signed the contract, as he would have a direct pecuniary interest in doing so.
I'm still trying to read the particulars of the case, but I am not an attorney, so some of it is just boilerplate filing. However, given the facts that Stern freely advertised a direct competitor to CBS while on their airwaves (and, let's be honest: just because he was to call Sirius "uh-uh-uh", doesn't change the fact that he was shilling for them), CBS received no compensation for said advertisement,and Stern himself directly benefitted from this advertisement in terms of dollars being added to his contract, I believe the CBS case has merit.
It will be up to a judge to decide, but I don't buy Stern's claim that CBS is being vindictive, particularly when Sirius "skirted" the law when making their 8k filing to the Securities and Exchange Commission.
Of course, it will be up to