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The one where I get to lecture the Wall Street analyst about Howard Stern

From Inside Radio:

Lazard Capital analyst Barton Crockett believes Stern will stay put, although he could take a pay cut and sign for $80 million a year. Crockett tells investors, “That represents a fair compromise between the view that Stern is worth less now than he was in 2004, and the fact that he still has a loyal subscriber base that could walk if he doesn’t renew.” …Crockett notes the self-anointed King of all Media … has “less influence” since leaving CBS Radio in 2004. “One sign of this is the drop in Google searches for ‘Howard Stern’ since he left terrestrial radio,” Crockett writes. He calculates Stern’s worth about one million subscribers and an estimated $74 million in cash flow a year to Sirius XM.

I never thought I'd be in a position to lecture a financial analyst about finance, but here goes nothing.

The value of Howard Stern is not a function of his Google search volume. Nor is it a function of the subscription revenue tied to some fraction of Sirius XM subscribers. What is it the analysts say, "past performance is no indication of future performance"?

The value of Howard Stern is equal to the net present value of his future revenue streams across any and all distribution channels where his content will be found.

In other words, Stern is worth the current value of the future dollars he can earn for the largest terrestrial broadcaster if, in fact, he were providing content for such a broadcaster (as he may one day do).

A financial analyst valuing an asset like Howard Stern based on his Google searches is like an MD diagnosing your illness by asking your astrological sign.

Come on.

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