They say content is king, but for Sirius XM Fund (NASDAQ: SIRI), the “king of all media” is also king. Bloomberg reports that Sirius XM is getting closer to a contract renewal with Howard Stern, the popular morning show host who has called the satellite radio provider home for the past 15 years.

Two longtime partners renewing their vows may not seem worthy of interest, but it is in this case. Stern was a game-changer for what was then Sirius Satellite Radio in 2006. It was much smaller than rival XM when the deal was originally announced in late 2004, but by the time the two sides combined into 2008 was Stern’s presence that made it financially a merger of equals – with executives from Sirius (not XM) running the show.

Back is Sirius XM. Losing it would be unfathomable, likely leading to a sharp drop in subscriber numbers at a time when audiences are already going in the wrong direction for reasons beyond the media giant’s control.

It’s also a topical nugget as there was speculation that Stern would make the leap to Spotify (NYSE: SPOT), in light of the world leader in premium streaming paying big bucks to land Joe Rogan and Michelle Obama at strengthen its podcasting efforts.

There’s also at least one meaty chunk of programming on Sirius XM that’s potentially on the way out, and Stern’s departure would turn the content into a crater as well.

And finally, we come to the terms of the agreement itself. After initially signing a $ 100 million a year deal in 2006 – then renewals in the range of $ 80 million to $ 100 million – sources tell Bloomberg negotiations here are in the range of $ 120 million per year.

Buy or bye booey

Stern has been a staple in satellite radio throughout his original five-year contract and two other five-year renewals, but he’s currently 66. Is he really want to continue? It is not a question of age. Morning radio hosts last forever. Stern is a spring chicken compared to some of the other icons in the industry. This is just a question because after all the money he has earned over the years, wouldn’t he rather enjoy his golden years in retirement? Sometimes it seems like he’s still working out of loyalty to keep his crew employed.

It’s fortunate for Sirius XM if Stern talks about sticking around after his current contract ends at the end of this year. Sirius XM started 2020 with consecutive quarters of declining net subscribers. Auto sales are collapsing and, given the pandemic, people are no longer commuting to work in the morning as they once did. Canceling a premium radio subscription seems like a no-brainer during a recession.

There’s also a chance that Stern isn’t the only tentpole content item leaving the satellite radio juggernaut. Barstool Sports and Sirius XM could also go their separate ways according to a tweet posted by Barstool chief Dave Portnoy shortly after the market closed on Tuesday.

I would say we’re 99.9% of Sirius. We are not in the same stratosphere in terms of negotiations. We’re just going to move to new platforms as always. Our crowd will follow as always.

– Dave Portnoy (@stoolpresidente) October 6, 2020

Barstool Radio has been a staple with its own channel since 2018. There hasn’t been a spike in Sirius XM subscriptions as we saw with the arrival of Stern, but given the active and loyal fan base of the daring sport icon, it would be naïve to think that there wouldn’t be a wave of follower defections if Barstool hit the road. Sirius XM losing both Stern and Barstool would be a big blow to the platform.

Stern goes to Spotify tends to happen every now and then, and with Spotify’s premium audience increasing over the past five years since Stern’s last renewal, it’s not quite outside the realm of. possibilities. The problem here is that Spotify isn’t likely to provide the kind of live audience that Stern’s show needs, and it may not have the scale of the morning show to justify it. pay Stern as much as Sirius XM has (and probably will) pay.

All of this is undeniably leverage for Stern. Whether it’s another five-year contract or a shorter term, he’s the one who holds the cards here in renewals with the media stock giant. Paying a record $ 120 million (an amount that also covers production and crew salaries) is a lot, but Sirius XM has a lot more to lose if it leaves at this point.