Howard Stern and his agent are suing Sirius XM Radio Inc. for failing to pay stock awards they say are due for helping it exceed its subscriber growth targets and go from a distant second to the dominant satellite radio service in the country.
In a suit filed Tuesday in New York, Stern's production company, One Twelve Inc., and his agent Don Buchwald said that Sirius, based in New York, made an initial bonus stock award after Stern started in January 2006 but failed to do so over the subsequent four years.
The suit claims that Stern's signing helped Sirius exceed its subscriber targets by at least 2 million subscribers in each year of the contract, triggering a new stock award each time. It also said Stern put Sirius in a position to complete its 2008 acquisition of XM Satellite Radio Inc., which had also courted Stern years earlier.
Sirius had around 230,000 subscribers to XM's 1.3 million at the end of 2003. As of the end of December, it had 20.2 million.
Buchwald and Stern were told last year by Sirius XM's general counsel, Richard Basch, that the bonus stock awards were not granted because the company did not include XM's subscriber base toward the total number of Sirius subscribers.
"When Sirius needed Stern, it promised him a share in any success that the company achieved," the suit said. "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."
A spokesman for Sirius XM did not immediately respond to a message seeking comment.
Stern and Sirius publicly feuded for months last year as the end of his $500 million, five-year contract was coming to an end. He announced on his weekday morning show in December he had agreed to a new deal running through 2015, although terms were not disclosed.
Stern, whose show airs from 6 a.m. to 10 a.m. EST Monday through Thursday, freed himself from the confines of terrestrial radio on Dec. 16, 2005, after hosting a wildly popular show syndicated by a division of CBS Corp.