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Sirius Responds to CBS’ Stern Suit

3/01/2006 09:53:00 AM Eastern

New York - Sirius Satellite Radio said it will “vigorously defend” itself against a lawsuit filed by CBS Radio against Sirius, Howard Stern and other parties.

A Sirius spokesman said, “CBS Radio’s claims against Sirius have no merit and Sirius plans to vigorously defend this action.”The company also stated, “Nothing in the complaint would prevent Stern from fulfilling its obligations to Sirius through December 2010.”

CBS Radio announced late yesterday that it is seeking damages for multiple breaches of contract, and misappropriation of CBS Radio’s broadcast time as well as fraud and unjust enrichment.It further seeks damages from Sirius for unfair competition and tortuous interference with Stern’s CBS contract.

Among the charges in the 43-page complaint, filed suit in the Supreme Court of the State of New York, is that Stern “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,” according to CBS Radio.

It is not yet clear how the suit will impact Sirius’ business. Equity research analyst April Horace, of Hoefer & Arnett, San Francisco, said, “I think the suit appears to be directed more to Howard, his company and his agent. Even Howard has stated that he feels the suit is aimed at him for a personal basis. I believe that Howard and Sirius anticipated some sort of reaction from CBS at some point in time.”

On his morning talk show on Sirius, Stern said he has hired two separate lawyers to help him fight the suit, because he wanted multiple opinions. He said his lawyers have assured him that CBS doesn't have a leg to stand on, because Stern's radio contract gave him full authority to talk about “anything he wanted to” on his show, and that Infinity management was routinely censoring portions of his program and could have censored the satellite radio conversations as well.

Further, he said that Leslie Moonves CEO of CBS allowed Stern to go on the CBS/Viacom owned David Letterman Show to discuss his Sirius radio deal, because “satellite radio was big news” and it increased the ratings to the TV show as well as to Stern's show.

XM Satellite Radio had no comment on the story.


-- Greg Tarr contributed to this story.

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