Howard Stern repeatedly and willfully breached his written contract
with CBS Radio over the last 22 months of that contract,
misappropriated millions of dollars worth of CBS Radio airtime for his
own financial benefit, and fraudulently concealed his interest in
hundreds of millions of dollars of Sirius stock while promoting it on
the air.
That on or about January 9, 2006, Sirius paid over 34 million shares of
stock, valued at approximately $220 million, to Stern and his agent
because Sirius exceeded by the end of 2005 certain subscriber targets
that were set in the Sirius-Stern contract. The complaint alleges that
the Sirius-Stern contract provided that Stern was to receive this stock
payment in 2010, but it had an acceleration provision that allowed
Stern to receive the compensation as early as January 2006 if these
subscriber targets were met. All of Stern's actions for which he
received this expedited compensation occurred during the time that
Stern was under exclusive contract with CBS Radio, when the Sirius
payment terms to Stern were kept secret.
This contract thus provided a compelling incentive for Stern to do all
that he could to help Sirius reach the subscriber targets by the end of
2005 so that he could receive his Sirius stock payment as soon as
possible while Sirius's stock was extremely valuable. Without the
accelerated payment, Stern would risk the decline of the Sirius stock
value. By taking action on CBS Radio's airtime in 2004 and 2005, Stern
assured himself of immediate access to $200 million in assets that
could be readily converted to cash.
By engaging in continuous promotion of Sirius on CBS Radio airtime
without any payment by Sirius to CBS for these advertisements and by
pocketing over $200 million dollars for his personal benefit, Stern
misappropriated millions of dollars worth of CBS Radio airtime for his
own financial benefit and the financial benefit of Don Buchwald, his
agent, and Sirius in contravention of repeated directives by CBS Radio.
That Stern also breached his contractual obligation to inform CBS Radio
of plans that might have a bearing on his future. Under the Agreement,
Stern had the obligation to give CBS Radio the first opportunity to
discuss participation in radio projects that are conceived during the
term of the Agreement, even if the concept or project was launched or
implemented after the term. Stern ignored that responsibility, and
negotiated and concluded his agreement with Sirius in secret.
To this day, Stern continues to breach his contract by refusing to
return property that belongs to CBS Radio -- the recordings of his CBS
radio program that, under his Agreement with CBS Radio, belong to the
company.
The suit further charges that Sirius intentionally interfered with and procured Stern's breach of the Agreement. Sirius knew that Stern had a contractual obligation to maximize the prospects for the success of the CBS Radio program and to comply with his duty of good faith. Sirius intentionally induced and caused Stern to breach these contractual provisions by offering to accelerate Stern's payment of millions of dollars in stock options to promote Sirius on CBS airwaves and by concealing Stern's stock interest from CBS Radio.
Howard said that Joel Hollander and Les Moonves are preparing to sue him for talking about SIRIUS while he was on the air. He said that it's so ridiculous because they allowed him to do that. He said they could have hit the delay button on him if they didn't want him talking about it on the air. He said he had a meeting with Les and Joel the other day but he wont' talk about that yet. This is so unbelievable to him because Joel and Les came on the air and congratulated him for his move to SIRIUS. They even said that they had both purchased SIRIUS radios!
Howard said that Mel Karmazin went to Les and asked him why he let him talk about it on the air the whole time. Les allegedly told Mel that he knew that he could sue Howard afterward so he let him go on the air and do it. Howard said that Les has never gone after anyone except for Dan Rather and another reporter for screwing up something about the President.
Howard said that Les is doing this to get the attention off of himself because he's going to screw up the radio division. He said that his lawyer has told him that this case is ridiculous and won't go anywhere. Howard said that Les once told him that he had to learn about his move to satellite on his birthday. He also said that this case will just bring him even more publicity so it will probably be good for him. He said that this whole case is laughable.
Howard said that he got teary at the meeting he had with Joel and Les but it's because he spent so many years there and they let him go on the air and refer to SIRIUS as ''Eh, eh, ehhh.'' He said that Joel even said that he liked it when he referred to it as that. He thought it was funny. Howard said that all of that stuff drove up the ratings and also the revenue for the company. He did the opposite of screwing them over, he brought them even more money than they would have made if he didn't talk about that stuff.
Howard said that Les wouldn't defend his show against the FCC or sue Clear Channel when they canceled his show and didn't pay off his contracts... but they will sue him for talking about his future job. Howard said that Les even put him on ''60 Minutes'' and David Letterman's show because he brings in the ratings. He
Howard said that the meeting he had with Les told him that he has damages because they're not making money now. Howard said that's not his fault, he's allowed to leave the company. Les also said that Howard got a bonus payment for selling radios. Howard said that his deal was in the papers so he didn't need to talk about it on the air. He also said that they sold record amounts of advertising on his radio show and made a lot of money in that last year there.
Howard said that Les is now saying that he basically hijacked his radio stations for a year. Now it's going to show how this guy is going to run that company right into the ground. He's not a CEO and it will show.
Howard said that there's an article in Talkers Magazine that shows he's the number one radio guy in the country even though eh's no longer on terrestrial radio. Howard went on to say that he's going to unleash on CBS radio now that they're suing him. He said he was keeping his mouth shut until this lawsuit came down. He said there has been some questionable practices over the years with those guys and he's going to investigate and expose that stuff to his fans.
Howard said that Les probably won't be running the radio division much longer and Tom Freston will probably take over once Sumner Redstone realizes what's going on. Howard also said that Joel is no Mel Karmazin and that's very obvious. He said that someone should take a look at what Jack FM is doing and how Les is running that company right into the ground.
Howard claims that Les turned to Joel during their meeting and told him he doesn't know how to pick a morning show. He did that right in front of Howard. He took a call from King of All Blacks who said that Booker was playing audio clips of Howard on his show yesterday so Howard thought that was kind of interesting. He said he doesn't care all that much about what happens over there anymore. He said he hopes that they all die.
The whole thing comes down to, in this layman's view, whether or not Howard actually concealed this whole deal with Sirius. Everyone is saying Howard was open about it, but then why are they filing this suit? The other part about the recordings, that's another issue, but Howard has physical possession of old tapes? Odd. _________________
In the months after Howard Stern announced his defection to Sirius Satellite Radio in a reported half-billion dollar deal, but before he left CBS Radio, he seemed to be talking up his future at Sirius. Why wait until February, after he was at the new job, to sue him and seek the $200 million bonus Sirius gave him in stock?
Howard Stern used our airwaves to advertise a competitor. We are supposed to get paid for advertising. We did not. And he was incentivized to do that, as shown by the bonus that he got [from Sirius]. We delayed suing him because we do not lightly enter into litigation. But now that we have, we are determined to see it through. We're suing not only for what he did on the airwaves, but for the bonus that he got as a result of misusing our airwaves. We are pretty confident of winning. And if you don't believe me, ask Les.
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CBS always had this... They chose not to use it for over a year and now want to play "victim??" Howard is plotting...
