Sirius Satellite Radio on Wednesday said it agreed to a five-year, $500 million deal with Howard Stern to host a Monday-through-Friday talk show.
Sirius CEO Joseph Clayton said Stern will also produce two other programs that could have comedy or music formats.
Sirius has been working on the deal for a couple of months, Clayton said.
Rival XM Satellite Radio Inc. of Washington said it also had contacted Stern.
Weve talked to Howard over time, says Chance Patterson, XM spokesman. But the bottom line is this is a good deal for the satellite radio category and it further validates that satellite radio has become a major factor in the entertainment industry.
Sterns contract with Sirius is worth about a $100 million a year, including salary and costs for production, staff, talent, marketing, overhead and building a studio. Sirius estimates it needs to generate a million subscribers to cover the costs.
As of Sept. 7, Sirius had more than 600,000 subscribers who pay $12.95 for satellite radio service.
XM, which charges subscribers $9.99 a month, had more than 2.5 million subscribers as of Oct. 1. It expects to have more than 3.1 million by year end and 20 million by 2010.