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Stern’s Compensation Doubles Sirius’s Q1 Losses

Though an expanding subscriber base nearly tripled Sirius Satellite Radio’s first quarter revenue, the company reported Tuesday that its losses more than doubled in the first quarter, pointing mainly to the $225 million it paid in stock-based compensation to shock jock Howard Stern and his affiliates as the culprit, writes Yahoo. The company reported total stock compensation expenses of $284.6 million, accounting for 20 cents per share of the loss.

A year ago, Sirius reported a Q1 loss of $193.6 million, or 15 cents a share. This year, however, the radio satellite provider posted a net loss of $458.5 million, or 33 cents a share, on the January-March reports.

Sirius said it expects to start turning a profit on a cash flow basis by the fourth quarter of 2006, and that its average cost to acquire a new subscriber dropped 41 percent to $113 in the quarter. The company also reported a subscriber base of 4.1 million at the end of the first quarter, and now hopes to have 6.2 million subscribers by the end 2006.

Also, CEO Mel Karmazin said Sirius did not plan to follow XM’s efforts in syndicating some of its programming to terrestrial radio.