CBS Radio Files Lawsuit Against Howard Stern
February 28, 2006

CBS Radio has filed suit against Howard Stern, his company One Twelve, Inc., his agent Don Buchwald, his agent's firm Don Buchwald & Associates, Inc. and Sirius Satellite Radio, Inc.

The lawsuit seeks "compensatory and punitive damages for multiple breaches of contract, fraud, unjust enrichment, and misappropriation of CBS Radio's broadcast time." It also seeks damages from Sirius for "unfair competition and tortious interference with Stern's CBS contract."

Stern addressed a report that the lawsuit was coming on his program this morning, calling the potential suit "unbelievable" and adding that the lawsuit "is to distract you from what is going on in the radio division." Stern admitted the potential suit is a reality and that he had a meeting on the subject recently with his lawyer, who called the suit "a total joke."  Stern later held a press conference alleging CBS was "bullying" him.

The 43-page complaint charges:

  • Howard Stern repeatedly and willfully breached his written contract with CBS Radio over the last 22 months of that contract, misappropriated millions of dollars worth of CBS Radio airtime for his own financial benefit, and fraudulently concealed his interest in hundreds of millions of dollars of Sirius stock while promoting it on the air.
  • That on or about January 9, 2006, Sirius paid over 34 million shares of stock, valued at approximately $220 million, to Stern and his agent because Sirius exceeded by the end of 2005 certain subscriber targets that were set in the Sirius-Stern contract. The complaint alleges that the Sirius-Stern contract provided that Stern was to receive this stock payment in 2010, but it had an acceleration provision that allowed Stern to receive the compensation as early as January 2006 if these subscriber targets were met. All of Stern's actions for which he received this expedited compensation occurred during the time that Stern was under exclusive contract with CBS Radio, when the Sirius payment terms to Stern were kept secret.
  • This contract thus provided a compelling incentive for Stern to do all that he could to help Sirius reach the subscriber targets by the end of 2005 so that he could receive his Sirius stock payment as soon as possible while Sirius's stock was extremely valuable. Without the accelerated payment, Stern would risk the decline of the Sirius stock value. By taking action on CBS Radio's airtime in 2004 and 2005, Stern assured himself of immediate access to $200 million in assets that could be readily converted to cash.
  • By engaging in continuous promotion of Sirius on CBS Radio airtime without any payment by Sirius to CBS for these advertisements and by pocketing over $200 million dollars for his personal benefit, Stern misappropriated millions of dollars worth of CBS Radio airtime for his own financial benefit and the financial benefit of Don Buchwald, his agent, and Sirius in contravention of repeated directives by CBS Radio.
  • That Stern also breached his contractual obligation to inform CBS Radio of plans that might have a bearing on his future. Under the Agreement, Stern had the obligation to give CBS Radio the first opportunity to discuss participation in radio projects that are conceived during the term of the Agreement, even if the concept or project was launched or implemented after the term. Stern ignored that responsibility, and negotiated and concluded his agreement with Sirius in secret.
  • To this day, Stern continues to breach his contract by refusing to return property that belongs to CBS Radio -- the recordings of his CBS radio program that, under his Agreement with CBS Radio, belong to the company.

The suit also charges "Sirius intentionally interfered with and procured Stern's breach of the Agreement. Sirius knew that Stern had a contractual obligation to maximize the prospects for the success of the CBS Radio program and to comply with his duty of good faith. Sirius intentionally induced and caused Stern to breach these contractual provisions by offering to accelerate Stern's payment of millions of dollars in stock options to promote Sirius on CBS airwaves and by concealing Stern's stock interest from CBS Radio."

The complaint in this lawsuit was filed in the Supreme Court of the State of New York, County of New York.




 
Breaking News
Cumulus Names Tommy Page SVP Of Brand Partnerships
Larry Blumhagen Appointed VP/Director Of Sales For CBS Radio Los Angeles
In Brief - March 30, 2015
March 27, 2015
eQB NOW
KIIS FM Announces Wango Tango 2015 Line-Up
In Brief - March 27, 2015
March 26, 2015
Rock 'n' Roll Marathon Series Teams Up With iHeartMedia
Big D Named New APD/Morning Show Personality At KPLV
Triton Digital To Integrate Live Audio Broadcast Ads For MLBAM
Sinclair Broadcast Group Launches Digital Ventures Group
WERO Taps Robyn Banks For Nights
In Brief - March 26, 2015
March 25, 2015
Kannon Named Morning Host At KVIL
NAB Show Presents "Cocktails And Conversation" With Mel Karmazin
Sunday Night Slow Jams Expands Operations Team
The Orchard Acquires RoyaltyShare, Makes Strategic Investment In Korrect
In Brief - March 25, 2015
March 24, 2015
Joseph Robinson Named President Of iHeartMedia Ventures Group
Jeff Zuchowski Promoted To VP/Industry Relations At Pandora
CBS Announces New Agreement With CBS News President David Rhodes
In Brief - March 24, 2015
March 23, 2015
jācapps V4 Platform Certified By Nielsen For Digital Audio Measurement
It's Official: Mancow To Host Mornings On The Loop
In Brief - March 23, 2015
March 20, 2015
Music News
Taylor Swift Tops iHeartRadio Music Awards
Quick Hits: Ariana Grande, Milky Chance, Billboard Music Awards, Rob Thomas, Christina Aguilera, Failure
Zayn Malik Discusses Exit From One Direction
Quick Hits: NCAA March Madness Festival, George Ezra, Saturday Night Live, Ozzy Osbourne, Duran Duran
Pitbull's Globalization Spreads To SiriusXM
Quick Hits: Rihanna, AWOLNATION, Three Days Grace, Zendaya & Radio Disney Music Awards, Bonnaroo, Audiotopsy
McCartney, Metallica To Headline Lollapalooza 2015
Zayn Malik Leaves One Direction
Kendrick Lamar Debuts Atop The Billboard 200
Quick Hits: Van Halen, Britney Spears / Iggy Azalea, A$AP Rocky, The Library of Congress
Lineup Announced for iHeartRadio Country Festival
Quick Hits: Outside Lands Festival, Milwaukee Summerfest, Taylor Swift, Sloss Music & Arts Fest, Justin Bieber, Skylar Grey with Kid Ink and Travis Barker, Elvis Costello
Jason Derulo Single Sets Radio Record
Quick Hits: Death Cab For Cutie, Nate Ruess, Black Sabbath, Juicy J, Built To Spill, John Fogerty
Pharrell Calls "Blurred Lines" Verdict a "Handicap" to Art
FMQB NOW

Pat Paxton
Pres. of Programming
Entercom

Advertisement:
Search FMQB.com
Advertisements:
FMQB Member Login
Email:
Pass:

Save
Not a member yet?
Sign up Now!
Sign Up for Breaking News!
Enter FMQB E-Tracking!