How is this shocking? As a Sirius shareholder, I love that Howard Stern talks about his looming move to Sirius in January. Free commercials are wonderful, but that’s what makes this suspension laughable. He’s been ranting about this or that offense by the FCC and/or K-Rock since almost the moment Sirius announced his new deal. Why would Infinity wait until now to suspend him? If they didn’t like it, they should’ve stopped it immediately, whether through an order or suspension. Waiting until now, more than a year later, Infinity looks stupid. Oh, shocker, he’s talking about Sirius more now that he’s 58 days away from starting his new gig.
Not surprisingly, Stern is playing this up to get maximum exposure. On Howard 100, they’re doing every hour on the hour coverage of the outrage. Yes, the outrage, because people are stupid. Those brilliant minds calling in are bitching about Infinity trampling on Stern’s First Amendment rights. Sorry, folks, but only the government can do that. Infinity Broadcasting is not the government. It’s a private business protecting (however foolishly belated) its business. With any other business, we’d call the employee stupid for publicly ranting against his employer. We’d register no shock if the employer took such an action. We’d only be amazed if the employer didn’t fire the employee. This case is no different in that fundamental logic just because Howard Stern has a microphone and use of Infinity’s airwaves. This example is more exaggerated than “reality”, but it’s not different. Duh.
That’s at least using some of the fancy words they’ve heard Stern use, regardless of how wrong the analysis may be. The conspiracy theorists calling in are rambling on about how this is a move by Infinity executives who hold Sirius shares. They’ve suspended Stern to drive the share price higher. Ummmm, if you thought market reaction would be anything other than indifference, stop and think. Even if Infinity fired Stern, he wouldn’t start on Sirius tomorrow. Too much marketing blitz for the holiday shopping season revolves around Howard Stern arriving on January 9th. If Sirius miraculously abandoned their plans, letting Stern start tomorrow, the shares would (maybe) go up.
But ask yourself how much bounce the shares would get for an unexpected 58 days on Sirius. Not much, of course, because Stern’s arrival AND potential firing by Infinity have been priced into the shares already. The only bounce coming is from the crazies who don’t understand that. As I said here, Sirius is a long(ish)-term investment for me, not based on whether or not Infinity grows a set early or late. The day-to-day “news” blips make little difference.