Sirius Satellite Radio Inc. said Thursday that it plans to issue 34,375,000 shares of its common stock to its new radio personality Howard Stern and his agent Don Buchwald.
In the company’s October 2004 agreement with Stern, Sirius agreed to deliver the shares in December 2010, or earlier if at the end of any fiscal year it had exceeded agreed upon subscriber targets.
On Dec. 31 the subscriber target was surpassed. The shares will be issued Jan. 9.
Separately Thursday, XM, the top U.S. satellite radio operator, said it has surpassed 6 million subscribers, and projected it will end 2006 with more than 9 million subscribers on the strength of new products, its lineup of music, sports and celebrity-based stations, and growth in the new-car, factory-installed market.
Late in December Sirius Satellite Radio, XM’s chief rival, said it had reached 3 million subscribers, fueled in part by promotions related to the start of shock jock Howard Stern, who next week begins broadcasting on Sirius.
In an interview with Reuters at the Consumer Electronics Show, XM chief executive Hugh Panero said the company projects it will have 20 million subscribers by 2010.
“Clearly what people are seeing here is continued growth in XM radio and the satellite radio market,” he said. Regarding iPods, he added: “We are going to compete in an enormously large portable consumer electronics marketplace, [but] people are going to have multiple devices.”
He reiterated that the company expects its cash flow this year to break even, a metric typically used to gauge the health of media companies. But he declined to comment on the prospects for delivering a profit, which analysts say is still far off for both XM and Sirius as they spend to grow rapidly.