Howard Stern and his former employer/ current nemesis CBS Radio reached a tentative settlement in a breach of contract case late yesterday, but there’s no ink on the dotted line.
“The only response we’re authorised to give you is the settlement agreement is not yet signed. We will release a statement when it is,” said a spokesperson at the office of Peter Parcher, Stern’s lawyer told the BBC late yesterday.
Likely, because each side wants to think very carefully about settling, when there’s a chance they could win at trial.
Both sides have real merit in their claims: The 46 page CBS complaint, filed 22 months after Stern announced he was leaving for Sirius, might appear to be punitive, given that CBS waited so long to file it. But it made sense to wait: No reason to file a suit if you can’t prove that the other guy benefitted, and that you suffered damages.
Sure enough, 22 months after Howard said he was taking his leave, ratings at CBS Radio crashed, and the group saw a more than 6% drop in revenue during the first quarter this year.
Sirius, on the other hand, is a-glow: Stern and his agent were granted 34 million shares of Sirius, proof that the radio concern thinks its meeting its subscriber targets.
Weakening CBS’ case are two things: While employees have a fiduciary duty to act in the best interest of employer, if the employer doesn’t enforce that obligation, then – voila! – the employee has no duty. This is a vexing conclusion for CBS to face in court, because they could have thrown Stern off the air anytime if they objected to his Sirius tubthumping.
What’s more, the widely-held belief is that CBS Radio is for sale. The last thing Les Moonves needs is to enter into a months or years long battle that would foul-up a billion dollar sale of his now-flagging stations.