Sirius XM gained 7 cents, or 5.7 percent, to $1.39 at 4 p.m. New York time in Nasdaq Stock Market trading, the biggest gain since July 7. The shares have more than doubled this year.
Stern, 56, first revealed the news on his early morning show, known for its uncensored content.
“It all worked out, very, very well,” Stern told listeners. “I got five f---ing more years of this.”
Stern’s new deal, which will run through December 2015, allows for Sirius to transmit Stern’s programming on mobile devices, the company said in a statement. Neither Sirius nor Stern disclosed financial terms of his new contract. Don Buchwald, Stern’s agent, didn’t immediately return telephone and e-mail messages.
Mel Karmazin, the company’s chief executive officer, said in the statement that Stern’s contract was “good for Sirius XM subscribers and good for Sirius XM stockholders.”
Stern is responsible for adding about 2 million subscribers to Sirius XM since he moved to satellite radio from terrestrial in January 2006, according to Tuna Amobi, an analyst at Standard & Poor’s in New York. Last week, Sirius XM said it reaches more than 20 million subscribers.
Stern’s show airs live weekday mornings, and takes place at the New York City headquarters of Sirius, inside a large 36th floor studio the company built especially for Stern. Stern’s programming is replayed throughout the day.
Sirius XM had been negotiating with Stern for weeks in an effort to reach a resolution before the expiration of his current contract this month, which was worth $500 million over five years.
The new contract “helps to retain the subscribers who are still using the Sirius radio for Stern access only,” David Joyce, an analyst at Miller Tabak & Co. in New York, said in an interview. “There had started to be some fear in the stock in the past week.”
Karmazin, in an interview in October, said Sirius XM was exploring programming alternatives in case the satellite broadcaster and Stern weren’t able to agree on a new contract. Without Stern, Sirius XM would “save $100 million a year” and use the money to fill the programming gap with various types of shows, said Karmazin, 67.
To contact the editor responsible for this story: Peter Elstrom at email@example.com