2.4M SIRIUS Subscribers needed to break-even with Stern
Monday, January 30, 2006 at 12:16 PM
BoA analyst Jonathan Jacoby has done some recalcuations from his previous estimates, that now reporting that SIRIUS will need 2.4 million subscribers (up 900,000 from 1.5 million) to break-even with the signing of Howard Stern. Instead of $500M, he says that SIRIUS needs to make up $679M estimated to payout to Stern.
Here's where his math comes from: Take the $400M of cash payments + $279M of equity compensation. Jacoby says the latter figure includes the $218 million already given to Stern, along with “incremental equity” the analyst expects Stern to get by exceeding subscriber targets this year, too.
"To reach break-even on Stern, we estimate Sirius requires 2.4 million incremental subscriptions," Jacoby wrote in a recent report. “While it is somewhat complex to estimate the exact number of incremental subscribers that signed up only because of Stern, we estimate [500,000] incremental ‘Stern’ net adds in 2005.”
Also of note, according to Jacoby, recent checks indicate that the early 2006 Sirius retail surge is now starting to fall off despite the continuation of hardware price discounting.
[Billboard Radio Monitor]
[Forbes]
Monday, January 30, 2006 at 12:16 PM
BoA analyst Jonathan Jacoby has done some recalcuations from his previous estimates, that now reporting that SIRIUS will need 2.4 million subscribers (up 900,000 from 1.5 million) to break-even with the signing of Howard Stern. Instead of $500M, he says that SIRIUS needs to make up $679M estimated to payout to Stern.
Here's where his math comes from: Take the $400M of cash payments + $279M of equity compensation. Jacoby says the latter figure includes the $218 million already given to Stern, along with “incremental equity” the analyst expects Stern to get by exceeding subscriber targets this year, too.
"To reach break-even on Stern, we estimate Sirius requires 2.4 million incremental subscriptions," Jacoby wrote in a recent report. “While it is somewhat complex to estimate the exact number of incremental subscribers that signed up only because of Stern, we estimate [500,000] incremental ‘Stern’ net adds in 2005.”
Also of note, according to Jacoby, recent checks indicate that the early 2006 Sirius retail surge is now starting to fall off despite the continuation of hardware price discounting.
[Billboard Radio Monitor]
[Forbes]
Barron's business weekly reported on it's January 23rd edition that XM Satellite Radio's 6 million subscribers, almost double that of Sirius, and its strong partnership with automotive partners will keep it a step ahead of its rival in coming years.
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