Stern will talk about the lawsuit at the opportune time. One of the things sharp radio guys get is timing. Amateurs shoot first and ask questions later on-the-air. While it may appear that this is how Stern does a show, this is a common and unfortunate misconception. Within a show, over the course of a series of shows, and over the course of a career, Stern remains the greatest radio personality ever, in virtually all areas, but timing at every level stands at the top of the list.
Speaking directly to the lawsuit, I venture that Mel Karmazin agrees with every word of it. In fact, I would not be shocked if he saw a copy of it before Stern and agent Don Buchwald approved it for filing. While I have absolutely no inside knowledge, I would not be surprised if Karmazin even offered ideas on how to spice it up.
Well, on Stern's Wednesday morning show, Act I, Scene II commenced (Warning: The You Tube clip I link to includes profanity. The volume is also low). The "opportune time" has arrived. That more spirited diatribe comes on the heels of a nice set-up that occurred around the time of the lawsuit.
If you think I am crazy, consider a couple of things. First, recall when Stern went on a similar rant about Sirius XM CFO David Frear, noting that he would not take "a [expletive] pay cut" in a new contract. Two days later, he signed a deal. That whole episode provided a buy on the dip opprtunity for traders and investors. Also, recall the history between Stern and Sirius XM CEO Mel Karmazin. Simply put, they go way back. And, last but not least, never take anything Stern says on-the-air seriously. It's all about generating publicity.
This development calms my nerves a bit with regards to being long SIRI during a time when the stock seems to be losing its momemtum. Howard Stern represents pretty much the only thing Sirius XM has going for it in terms of top-of-mind, water cooler talk, brand awareness-type publicity. As I have noted, Karmazin not only knows this, he appreciates it.
My only concern -- the whole charade might backfire. As of this writing (Thursday, early evening), I have yet to see the major, or even minor, media outlets pick up on this story like they did the Frear, no bleeping pay cut outburst. It made headlines across all mediums at every scale.
The absence of the lawsuit rant from the on and offline 24-hour news cycle could speak to the notion that the reach of Stern and Sirius does not cast a net much wider than 20 million ardent subscribers. The potential reality of an obscure existence, relative to competitors such as Apple (NASDAQ:AAPL) and Pandora (NYSE:P), does not bode well for Sirius XM, the company, or SIRI, the stock, looking out over the long-term.
One important aside: Sirius XM announced a date for its earnings call. It will take place August 2nd. Guidance did not accompany the press release. I am not sure exactly how to take that. It could mean that there is none or maybe Karmazin, "the Zen Master," is saving the details for the theatrics he is known to pull off on conference calls. At Sirius XM, only Stern is better at executing theatrics than his boss.
Disclosure: I am long SIRI.