From Bloomberg.com. Sirius XM Radio Inc. (SIRI) was sued by radio personality Howard Sterns production company and his agent for failing to pay stock awards they claim were promised.
The suit was filed in New York state Supreme Court today by One Twelve Inc. and Sterns agent, Don Buchwald. Sirius, which courted Stern when the company was running second to XM Satellite Radio Inc.,
promised to pay a series of stock awards if the radio company exceeded its subscriber estimates, according to the complaint. Buchwald was promised a fee of 10 percent of One Twelves compensation, they said.
Sterns show began on Sirius in 2006. Two years later, the company merged with competitor XM and, in 2010, the total number of Sirius XM Radio subscribers hit 20 million, according to the complaint. Except for the first year of the Sirius contract, the company has refused to pay One Twelve the stock awards, according to the suit. The plaintiffs said in the complaint they are seeking unspecified amounts due with interest.
When Sirius needed Stern, it promised him a share in any success that the company achieved, according to the suit. But now that Sirius has conquered its chief competitor and acquired more than 20 million subscribers, it has reneged on its commitment to Stern, unilaterally deciding that it has paid him enough.
Patrick Reilly, a spokesman for New York-based Sirius XM Radio, said in an e-mail that the company just signed a contract through 2015 with Howard Stern, and he is a valued part of our company. We were thus surprised and disappointed by the subsequent legal action.
Reilly added that We have met all of our obligations under the terms of our 2004 agreement with Howard, his agent and production company.
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