Pricing Howard Stern

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Pricing Howard Stern

The shock jock has once again run afoul of regulators. At what price does Infinity cut him loose?

July 9, 2004: 4:01 PM EDT

By Krysten Crawford, CNN/Money staff writer

NEW YORK (CNN/Money) - Howard Stern is looking expensive these days. His employer, Infinity Broadcasting Corp., is reportedly facing a whopping $1.5 million fine for an episode on Stern's morning radio program that included sexual references that government watchdogs say crossed the line.

Congress, meanwhile, is mulling legislation that would boost fines for television and radio programming deemed indecent from $27,500 to as much as $500,000 per violation.

But fans who fear that Stern is about to be muzzled on syndicated radio can relax. Turns out, Stern is a huge cash cow for Viacom unit Infinity.

Viacom (VIAB: down $0.12 to $34.20, Research, Estimates) does not disclose The Howard Stern Show's finances, but analysts estimate that the morning program hauls in roughly $175 million a year in advertising revenues. Factor out costs including the stratospheric $30-plus million take that Stern and his sidekicks get every year, and analysts say the show reaps as much as $25 million a year in profits for Viacom.

Those numbers make all the recent caterwauling over Stern's fate at Viacom look like much ado about nothing.

"There's only one thing that rules whether Howard Stern stays or leaves Infinity and that's money," said Michael Harrison, the publisher of Talkers magazine, which covers talk radio. "If Howard Stern brings in more money than it costs to have him, he stays. If it costs more money to have Howard Stern than he brings in, he leaves."

It's apparently that simple, despite what Stern said last week when he declared at a press conference he hosted that he was "so dangerously close to being forced off the air."

To be fair, there's a reason why Stern and his backers are nervous.

The crackdown on indecency

Janet Jackson's breast-baring stunt at the Super Bowl halftime show thrust into the political spotlight an epic battle between decency crusaders and First Amendment zealots over salacious programming.

The Federal Communications Commission responded with an investigation of the incident. At the same time, pre-existing efforts to push through federal legislation upping indecency fines gained widespread support within Congress. This week, the FCC dusted off a proposal to require broadcasters to keep recordings of their programs for a limited time, a move that critics said would help regulators pursue broadcasters more aggressively.

As for Howard Stern, an ongoing FCC investigation of a 2003 segment including crude sexual references resulted last month in the largest fine ever leveled against a broadcaster for indecent programming. To end government charges, Clear Channel Communications, which licensed the Stern show, agreed to pay $1.75 million.

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http://money.cnn.com/2004/07/09/news/newsm...dex.htm?cnn=yes