Pair issued stock worth $220 million.
Back in October 2004, the agreement crafted by Sirius Satellite Radio and agent Don Buchwald for Howard Stern included a payout of common stock sometime before December 2010 if Sirius exceeded a specific subscriber target.
That day comes next week.
Sirius revealed Thursday in an SEC filing that its subscriber total at the end of 2005 “exceeded the subscriber target we agreed upon” when it first contracted with Stern. Exceeding that target triggered the issuance of 34,375,000 shares to Stern and Buchwald. Sirius said those shares were valued in October 2004 at about $110 million.
Sirius senior director of investor relations Michelle McKinnon tells Billboard.biz the shares are not a bonus payout. “Those are just part of the regular deal,” she said, adding that, per the contract, Stern and Buchwald were entitled to claim an equity stake in Sirius of about $22 million in stock per year as part of the total contract. When the contract was first drafted those shares, which in total were worth about $110 million, were trading at about $3.20.
As of mid-afternoon Thursday (Jan. 5), those same shares have doubled in value and are now trading at $6.40 per share. That makes Stern’s and Buchwald’s original share stake worth $220 million.
Sirius said in a separate release that it ended 2005 with 3,316,560 subscribers; an increase during the year of 2.17 million subs and with 1.14 million of those coming during the last three months of the year.