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CBS sues Stern

R

rho01

February 28, 2006

CBS radio inc. Files Suit Against Howard Stern and Related Parties for multiple Breaches of Contract, misappropriation and unjust enrichment

CBS Radio today announced that it 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 is for compensatory and punitive damages for multiple breaches of contract, fraud, unjust enrichment, and misappropriation of CBS Radio’s broadcast time. It further seeks damages from Sirius Satellite Radio, Inc. for unfair competition and tortious interference with Stern’s CBS contract.

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 further charges that 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.


* * *

Contact: CBS Communications
212-975-1077
 
As Stern said on the air today, this is laughable. Moonves and Hollander came on K-Rock the final week and said they had bought Sirius radios themselves. CBS could have done anything they wanted to silence Stern from talking about Sirius...fines, suspensions, even firing him. Instead, they let him get away with saying "eh-eh-ehh" and suspended him for ONE DAY with a month left to go. This is Moonves and Hollander covering their behinds now that the Arbitrends show what a failure "Free FM" is.
 
Imponderable

> As Stern said on the air today, this is laughable. Moonves
> and Hollander came on K-Rock the final week and said they
> had bought Sirius radios themselves. CBS could have done
> anything they wanted to silence Stern from talking about
> Sirius...fines, suspensions, even firing him. Instead, they
> let him get away with saying "eh-eh-ehh" and suspended him
> for ONE DAY with a month left to go. This is Moonves and
> Hollander covering their behinds now that the Arbitrends
> show what a failure "Free FM" is.
>

I figured eventually there would be a lawsuit over some sound bite but this is absurd. It was they that let him stay on there getting untold PR for Sirius and even now they are they are STILL helping him stay in the public eye.

No wonder they posted a 9 billion dollar loss.
 
Waaa Waaa Waaa
CBS Radio doesn't want to take responsibility for their own screw-ups.

<P ID="signature">______________
Ray Dio</P>
 
> As Stern said on the air today, this is laughable. Moonves
> and Hollander came on K-Rock the final week and said they
> had bought Sirius radios themselves. CBS could have done
> anything they wanted to silence Stern from talking about
> Sirius...fines, suspensions, even firing him. Instead, they
> let him get away with saying "eh-eh-ehh" and suspended him
> for ONE DAY with a month left to go. This is Moonves and
> Hollander covering their behinds now that the Arbitrends
> show what a failure "Free FM" is.

I don't think Free FM has to be a failure. I do think there is good talent on the FM dial that needs time to develop. Even Howard admitted as much. This ratings book won't be the last bad one, but saying "what a failure Free FM is" is probably a bit presumptuous. It will mean finding good radio talent and assessing that talent for the different time slots on the dial. Kinda like assessing players for the next NFL Draft. CBS Radio needs to ride out the inevitible market slide, and it seems they are handling the changes with all of the grace of Tonya Harding on skates.

For his part, Howard's show has been a disappointment for me after two months. Lately, in particular, he has had guests where his interviewing was really bad. Who was the shrill wife of the former Mets and now Orioles pitcher? He just let her take over the show. People who pay for Sirius don't want to hear that. He also had Roger Ebert and John Stewart on last week, at the same time, and had to set up a fight between Roger and Debbie Schlossel. What about asking them to talk politics, or movies, or whatever? That was the best he could do with that interview? He said he lost his creative energy at the old show and wanted to get back to where he was twenty years ago? Well, I am waiting to see what that must have been like. Now he will play the victim, like a two year old, and bring up Les Moonvies at every opportunity. Howard, you've moved on. Shut up and give us a better show.
 
Jon Stewart and Roger Ebert were great on the air. If you have ever listened to Stern, Debbie Schlussel calls in to accuse anyone and everyone of having ties to Al Quada and Jihad. It's funny. And they did talk about movies. They talked about the Oscars too. And Anna Benson is a somewhat controversial figure in New York. Do you even follow sports? Maybe you should pay more attention to pop culture and the actual show instead of looking for things just to talk (BLEEP) about of which you know nothing about.

The show has been great the past 2 months. Better than I've heard in years.
 
> None of us is a securities attorney so the actual legal aspects of this case may, in fact, have some merit. If you've ever gone up against a large broadcaster in your own career (and Mr. CKLW has) you know that the companies usually have the nastiest lawyers who have written contracts that always favor them in a contract dispute over you, the little guy. Even when the "little guy" is Howard Stern.

With that in mind, Mr. CKLW is glad that he bailed out of his 4 year holding of Sirius stock, sustaining a moderate loss.

The idea that Stern will now spend an inordinate time on his show, that people are paying to hear, to listen to him whine and claim victimhood at the hands of his ex-employer is both hilarious and pathetic. That he would dare claim Mr. Moonves has a kind of personal jihad against him does not even pass the snicker test, let alone the laugh test. I'll leave it to others to chronicle the number of dead bodies, both literal and figurative, that Howard Stern has climbed over on his way to the top. There is almost a biblical sense of payback and justice here, no matter the outcome.
 
Re: Imponderable

> I figured eventually there would be a lawsuit over some
> sound bite but this is absurd. It was they that let him stay
> on there getting untold PR for Sirius and even now they are
> they are STILL helping him stay in the public eye.
>
> No wonder they posted a 9 billion dollar loss.
>

I dont like Howard and think he is a fraud. But this lawsuit is a bigger fraud. Howard honored his contract until the last day- END OF STORY. I really hope CBS doesnt see a dime because of this.
 
Re: Imponderable

>FROM BLOOMBERG: ``They said I misled them, but I've been talking about going on satellite radio for years,'' he said. ``They gave me permission to go on the air,'' Stern said. Hollander had advised him not to mention Sirius by name while broadcasting on CBS Radio, Stern said.

<font color=red>Stern said his former employers had seven delete buttons on his tape-delayed program yet never used them to prevent him from speaking about Sirius, which he said he referred to as the ``Eh Eh Radio'' while on CBS Radio. </font>

``Les Moonves told me, `I subscribe to Sirius Radio. I am going to be out there listening to you every day. Good luck, Howard.''' Stern said.
F CBS, and F Jackie.
 
This could be a costly lawsuit for Sirius, wonder if its in Howard's contract he covers things like this himself of halfway. With Howard's making $600+ million and now lawsuits, this guy could wind up costing Sirius a lot more than they bargained for...
 
Re: Imponderable

> > I figured eventually there would be a lawsuit over some
> > sound bite but this is absurd. It was they that let him
> stay
> > on there getting untold PR for Sirius and even now they
> are
> > they are STILL helping him stay in the public eye.
> >
> > No wonder they posted a 9 billion dollar loss.
> >
>
> I dont like Howard and think he is a fraud. But this lawsuit
> is a bigger fraud. Howard honored his contract until the
> last day- END OF STORY. I really hope CBS doesnt see a dime
> because of this.
>


CBS is the bigger fraud in all this
 
> Jon Stewart and Roger Ebert were great on the air.

They were great, Howard wasn't. How much better could the show have been if he gave them the air time that Anna Benson received?

If you
> have ever listened to Stern, Debbie Schlussel calls in to
> accuse anyone and everyone of having ties to Al Quada and
> Jihad. It's funny.

I've heard her on Stern (she called NPR: National Palestinian Radio), Bill Maher, a few other places. He set Roger Ebert up to argue with her, and she was no match for Roger. Sorry, he wasted the opportunity to have a really good discussion. She may be smarter and a little more sane than Ann Coulter, but is a shrill nut job just the same.

And they did talk about movies. They
> talked about the Oscars too.

A minute or two, maybe.

And Anna Benson is a somewhat
> controversial figure in New York. Do you even follow sports?
> Maybe you should pay more attention to pop culture and the
> actual show instead of looking for things just to talk
> (BLEEP) about of which you know nothing about.

I knew about the story, just could not recall her name. (I knew nothing, huh? Hubbie was on the Mets, now an Oriole. Glad I knew "nothing".) I saw her web site a month ago. I wonder, since she plugged her web sites over and over, did Sirius get a cut for that advertising? By the way, I live in the Seattle area. We are not short of interesting personalities, and don't need anyone from New York to teach us about culture.

> The show has been great the past 2 months. Better than I've
> heard in years.
>
There is a lot of good stuff out there. I do think Howard does a better morning show than most jocks, but since the first week the show has been nothing special. Don't assume the show has to be good just because you are paying for the service, either. As for "it's funny," I'm glad you laughed.
 
Re: Imponderable

> > > I figured eventually there would be a lawsuit over some
> > > sound bite but this is absurd. It was they that let him
> > stay
> > > on there getting untold PR for Sirius and even now they
> > are
> > > they are STILL helping him stay in the public eye.
> > >
> > > No wonder they posted a 9 billion dollar loss.
> > >
> >
> > I dont like Howard and think he is a fraud. But this
> lawsuit
> > is a bigger fraud. Howard honored his contract until the
> > last day- END OF STORY. I really hope CBS doesnt see a
> dime
> > because of this.
> >
>
>
> CBS is the bigger fraud in all this
>
The "Free FM" Experiment is an total disaster, DLR has ditched his show for a week (they say vacation, I say major retooling) and is being replaced by local jocks in their respective markets(smells like local stations want more control). Adam Carolla isnt pulling the numbers himself either,but his show is passible for FM. Howie left on a high note as a gentleman and Les Moonves hasnt even granted the man the common courtesy to his personal materials, which are locked in a bank vault. Now, here comes a fruitless lawsuit from CBS,which hopefully a right minded judge will see fit to toss out for its sheer lack of creditability.
 
Don Geronimo from trhe Don and Miek Show (a CBS Radio program I might add) brought up a point today on their about this which is something in Stern's favor on this... If CBS Radio really didn't like the discussion of Sirius and the such, they could have fired him back then... IMO, the entire reason for Cbs bringing this suit up now is because of the pathetic trends of Sterns former stations ion Chicago, LA and NY. They have to cover their butts somehow and throw the blame out somewhere and in this case, its towards Stern... As he said this morning when he mentioned the deal, if anything this will get more folks to satellite, because its getting Stern's name out there even more...


> > None of us is a securities attorney so the actual legal
> aspects of this case may, in fact, have some merit. If
> you've ever gone up against a large broadcaster in your own
> career (and Mr. CKLW has) you know that the companies
> usually have the nastiest lawyers who have written contracts
> that always favor them in a contract dispute over you, the
> little guy. Even when the "little guy" is Howard Stern.
>
> With that in mind, Mr. CKLW is glad that he bailed out of
> his 4 year holding of Sirius stock, sustaining a moderate
> loss.
>
> The idea that Stern will now spend an inordinate time on his
> show, that people are paying to hear, to listen to him whine
> and claim victimhood at the hands of his ex-employer is both
> hilarious and pathetic. That he would dare claim Mr.
> Moonves has a kind of personal jihad against him does not
> even pass the snicker test, let alone the laugh test. I'll
> leave it to others to chronicle the number of dead bodies,
> both literal and figurative, that Howard Stern has climbed
> over on his way to the top. There is almost a biblical
> sense of payback and justice here, no matter the outcome.
>
 
Stern gave them both a lot of time. He talked to Jon about hosting the Oscars. He talked to Jon about a staff member committing suicide. Then when Ebert came in, he talked about hosting and past hosts. Ebert talked about dating Oprah. Ebert talked about Siskel. Ebert talked about how he won't review SuperTwink. What the (BLEEP) else do you want from an interview?

Bottom line, it was a great interview. You'll never hear anything like it anywhere else. Even if Ebert was a guest on the Daily Show, it would be a 5 minute canned interview that would be about 2% of how entertaining they were on Stern.

When I first got Sirius (Nov '05), in my opinion, it wasn't worth it. But I listen to and enjoy Stern so much now, I hardly watch TV anymore. It's extremely entertaining. If you're a Stern fan, you're in heaven with him on Sirius.

I'm not justifying my subscription by saying it's funny. It is funny. And I'm proud to drop $13/month on the product.
 
> Don Geronimo from trhe Don and Miek Show (a CBS Radio
> program I might add) brought up a point today on their about
> this which is something in Stern's favor on this... If CBS
> Radio really didn't like the discussion of Sirius and the
> such, they could have fired him back then...

And this is EXACTLY what I thought, too when I read it. One of the parts of the lawsuit CBS is seeking damages for is breach of contract.

Well, if he allegedly breached his contract, then why was he not terminated? Any lawyer worth half their salt would be able to rip this apart.

The only issue I see with CBS is Stern using their air time to promote Sirius and his move. But, again, if they are claiming breach of contract, CBS did nothing to stop it.
 
Re: Lawsuit

This could be interesting. Both sides have a point. Yes CBS could have fired him, but that would have costed CBS some cash because of the advertisers that had purchased Stern's show through the end of the year. Stern getting the excelerated payout makes this interesting. How is this different from a DJ who owns his own Bar, and continues to promote the bar on the air without compensating the owners of the station. How is this different than taking $100 from a car dealer to mention them on the air, without them paying the station for the spot?
 
The idea that Stern will now spend an inordinate time on his
show, that people are paying to hear, to listen to him whine
and claim victimhood at the hands of his ex-employer is both
hilarious and pathetic.

Actually, this is quite compelling. He doesn't sound pathetic. This law suit is pathetic.

That he would dare claim Mr. Moonves has a kind of personal jihad against him does not even pass the snicker test, let alone the laugh test.

I don't think he's claiming that at all, but it is interesting that Mr. Moonves took the announcement of Stern leaving CBS for Sirius on his birthday a little too personally. There is something rather peculiar about that.

I'll leave it to others to chronicle the number of dead bodies,
both literal and figurative, that Howard Stern has climbed
over on his way to the top.

Yeah, that whole Vince Foster thing, Opie and Anthony's careers, Brother Weeze, John DeBella, etc.

There is almost a biblical
sense of payback and justice here, no matter the outcome.

That is just silly hyperbole.

Is this Chaunce Hayden?
 
Re: Lawsuit

> This could be interesting. Both sides have a point. Yes CBS
> could have fired him, but that would have costed CBS some
> cash because of the advertisers that had purchased Stern's
> show through the end of the year. Stern getting the
> excelerated payout makes this interesting. How is this
> different from a DJ who owns his own Bar, and continues to
> promote the bar on the air without compensating the owners
> of the station. How is this different than taking $100 from
> a car dealer to mention them on the air, without them paying
> the station for the spot?
>

Stern wasnt taking anything away from sirius before he left CBS or engaging in any pay/plugola. It was clean,legal and to the point. CBS screwed up on putting in "Cubic Zirconium" David Lee Roth into a slot he didnt earn.
 
Re: Lawsuit

> >
>
> Stern wasnt taking anything away from sirius before he left
> CBS or engaging in any pay/plugola. It was clean,legal and
> to the point. CBS screwed up on putting in "Cubic Zirconium"
> David Lee Roth into a slot he didnt earn.
>
No, he did take a hugh payout for selling lots of Sirius radios in 2005, while employed at CBS. He may not have received the check until January, but he earned the money by pushing Sirius in 2005.

Yes, DLR is terrible, but that has little to do with the lawsuit. Again, Im not saying CBS will win, but I see where they MIGHT have a case.

Either way it aint good for Howard. Even if he fights and wins, it's going to cost him a bunch in legal fees.
 
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