Sirius Makes $500 Million Bet on Howard Stern

Dec. 3, 2005 — -- Revolutionary or revolting? If that's the question, the answer is Howard Stern.

For years, the 51-year-old shock jock has amused and annoyed millions on radio, TV and even in his movie, "Private Parts." It's safe to say Stern has done more for flatulence and strippers than anyone on the radio.

"Gee, it's no surprise that guys like to watch girls having kissing and sexual things with other girls," said Joe Levy, Rolling Stone magazine's deputy managing editor. "What he did was put that on the radio."

Whether you think Stern is hugely funny or hugely offensive, Sirius Satellite Radio believes he is worth a whopping $500 million. Sirius will pay Stern $500 million over five years to move his show this January from traditional radio to the still young business of satellite radio.

"I think it's going to drive subscriptions and I think it has been driving them, as well," said April Horace, a telecom analyst at Hoefer & Arnett Inc. "Over the last 18 months, consumer awareness of satellite radio has almost doubled, and in some cases, tripled."

Right now, Sirius has a little over 2 million subscribers. But Stern has a mammoth audience of at least 12 million listeners, and Sirius is banking on the idea that the young, largely male audience will follow its leader.

"My father told me every day of my life that I was an idiot and a moron," Howard Stern has said. "And who's he kidding. He never made more than 20-grand a year."

"What works so well for Howard Stern is that he's as mean as everyone in his audience wants to be themselves and he's as smart as they wish they were," Levy said.

In an interview for CBS' "60 Minutes" to air Sunday, Stern talks about the "vicious things" he says.

"When I get really angry and fired up and feel like my back is up against the wall, I will say vicious things," Stern tells "60 Minutes." "Rather than hide that, I would rather put that out on the radio and let someone see the full range of emotion."

Everyone is wondering what Stern's new Sirius show will be like. Satellite radio is free of the decency controls and federal regulators that have tried -- but never really succeeded -- to reign Stern in for years.

"Everybody is holding their breath," Horace said. "I think he's going to do something outrageous. I think he's going to prove he can be successful on this platform."