CBS Corp. and its former morning radio star Howard Stern have settled a bitter breach-of-contract lawsuit over the shock jock’s defection to a rival satellite radio service, the two sides said on Friday (May 26).
Stern, a fixture of morning FM drive time for decades and one of CBS Radio’s biggest assets before jumping to Sirius Satellite Radio in January, came away from the settlement achieving one of his long-sought goals.
As part of the deal, Stern will gain rights to his old CBS Radio broadcast material in return for unspecified payments to CBS, including $2 million from Sirius. Further details of the agreement were not disclosed.
“The lawsuit brought by CBS Radio against Howard Stern, Sirius and others has been settled,” according to a joint statement by CBS and Stern’s agent, Don Buchwald.
Officials at CBS and Sirius declined comment on the settlement, as did Stern’s lawyer, Peter Parcher.
But the deal ended an acrimonious public feud between a corporate giant of the broadcast industry and a performer who was alternately reviled and beloved as one of the industry’s best-known talents.
In the weeks leading up to his departure from CBS, Stern had complained on the air that CBS was refusing to come to terms on a deal that would give him rights to recordings of his old broadcasts once he left.
Appearing as a guest on the CBS “Late Show with David Letterman” earlier this year, Stern ranted against his former bosses on their own airwaves, calling CBS chief Leslie Moonves “one of the biggest jerks on the planet.”
Stern, who battled the U.S. Federal Communications Commission for years over broadcast decency standards, stunned the radio industry in October 2004 when he announced that he was leaving the public airwaves to join subscription-based Sirius.
At the time, Stern said he was fed up with the FCC’s crackdown on TV and radio broadcasters in the aftermath of Janet Jackson’s breast-baring Super Bowl halftime performance on live television.
Landing a five-year contract at Sirius widely valued at $500 million, Stern ended his run on CBS Radio in December 2005 and debuted a month later on the freewheeling, unregulated world of satellite.
CBS filed suit in February against Stern, his company One Twelve Inc., Buchwald and Sirius, seeking unspecified compensatory and punitive damages for breach of contract, fraud and misuse of CBS broadcast time, among other accusations.
The suit claimed Stern used his waning 14 months at CBS to promote his move to Sirius and drive up advance subscriptions in return for hefty stock options under a secret marketing pact with Sirius while he was still under CBS contract.
Stern insisted his deal with Sirius was entirely above board and that the lawsuit was a vendetta against him.
Experts said it was no surprise that the litigation was settled out of court, as are most such disputes.
“Mainly they are settled because there is no winner, and you cannot force a person to work for you even if they’re under contract,” said Barry Peek, an attorney specializing in entertainment and labor law.
The departure of Stern, whose radio show was long one of the most popular in morning drive time, was a clear financial setback for CBS Radio, which saw its revenues drop 6 percent in the last quarter.
Even Moonves acknowledged that “Howard was a loss,” and his radio division has struggled to replace Stern. Last month, CBS announced it was bringing radio bad boys Opie & Anthony back to its airwaves under a rare talent-sharing deal with Sirius rival XM Satellite Radio, after rocker David Lee Roth bombed as Stern’s immediate successor in seven markets.
CBS Class B shares dropped 20 cents to $26.10 on the New York Stock Exchange. Sirius fell 6 cents to $4.16.