Wednesday, March 01, 2006

The SEC Could Make the FCC Seem Like Stern's BFFL

CBS suing Howard Stern over the manner in which he used CBS airwaves to promote his moving from the "terrestrial" airwaves to satellite radio is interesting in more ways than simply the usual vicarious thrill one gets from watching ridiculously rich, pampered people use their considerable charisma (in the case of Stern) and their considerable corporate clout (in the case of CBS chief Les Moonves) to smear one another.

I'm far from an expert in securities law, but it would seem to me that if there is any merit whatsoever in the CBS claim then it may be a matter of interest to Eliot Spitzer or the SEC. The "acceleration clause" by which Stern would recieve 34 million Sirius shares, $220 million worth, if his new program reached a certain subscriber level at a date as early as this year is both at the heart of the CBS claim and what may be of interest to regulators.

Is a media product the size of Howie obliged to inform all concerned what his incentive and ownership position is in any new venture? If not, why not? If the claims are valid, Stern could have bigger problems than simply just the CBS suit.

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