Howard Stern Lawsuit Dismissed
A New York judge has decided to end the lawsuit between Howard Stern and employer Sirius Radio over “ambiguous language” in their contractual agreement.
Stern, who happens to be a judge on America’s Got Talent, filed the suit after claiming that Sirius was in breach of their contract. The contract that was drawn up entitled his company, One-Level to receive profits based on paid performance which would be calculated by the rise in subscribers. According to the deal Stern had the potential to receive five separate stocks at $75 million each if subscribers were met. In addition if XM radio and Sirius radio were to merge, Howard Stern was to earn an additional $25 million.
According to Stern, he met the figures on subscribers and exceeded, which he claims Sirius underestimated how many subscribers he could pull in and the payout to match. However, both parties agreed that the station did their part in 2006 when Howard Stern exceeded Sirius’ subscriber target by paying a handsome $75 million to Stern’s company, as well as his manager receiving $7.5 million.
However, the next bonus cycle raised red flags for Stern in 2008 when there was question whether or not XM subscribers should be tallied in Howard Stern’s bonus when the two companies merged. If XM subscribers were indeed counted, which they weren’t, Stern would have earned $300 million in addition to his regular compensation from Sirius.
When Judge Barbara Kapnick dismissed the case for its “ambiguous language” she had this to say about the suit:
At the time the parties entered into the Agreement, it is clear that the only subscribers that the parties considered part of the ‘total number of Sirius subscribers’ for purposes of calculating ‘Performance Based Stock Compensation’ were those individuals who subscribed to the Sirius radio system.
As for the issue regarding Stern’s payout with the merge of XM radio and Sirius radio, Kapnick had this to say:
Most importantly, to the extent the parties contemplated the relevance of new subscribers acquired by merger at all, they provided for their consideration under an entirely separate section entitled ‘XM Merger.’ To find in plaintiffs’ favor, then, would require this Court to ignore this explicitly distinct treatment of subscribers acquired by merger.
Howard Stern’s claims were dismissed on the account that they were prejudice.