CBS sues Stern for fraud
Says radio personality used CBS airtime for his own financial benefit; Stern counters that former boss has 'vendetta.'
February 28, 2006: 5:33 PM EST
NEW YORK (Reuters) - CBS Radio says that Howard Stern was acting behind its back in his final months with the company, and intends to demonstrate that in court.
In a suit filed Tuesday, the broadcaster alleges that Stern signed a secret agreement with Sirius Satellite Radio (Research) that would give him a payment of Sirius stocks worth over $200 million in January 2006 if he met subscriber targets.
CBS says Stern promoted Sirius in his final months with the company, in violation of his contract with the company.
The lawsuit also says that Stern is keeping audio recordings that belong to CBS, a breach of contract.
Stern responded by saying that CBS chief Les Moonves is pursuing a personal vendetta against him because the network's radio fortunes have plunged since he left to join satellite radio.
"I'm offended. I really do think this is a personal vendetta. Les has had it in for me for a long time. I don't deserve it," Stern told a news conference.
The New York Post reported the lawsuit would seek $500 million from Stern.
The complaint was filed with the New York Supreme Court.
The hugely popular Stern shocked the broadcasting world in October 2004 when he signed a five-year deal with Sirius reportedly valued at $500 million. In January, he began broadcasting on Sirius, where his locker room humor fills two entire channels.
He broadcast for CBS Radio until days before his switch and relentlessly spoke of that move as it neared.
Stern was replaced by former Van Halen rock group lead singer David Lee Roth, whose ratings have paled in comparison, according to media reports.
"They're floundering," Stern said, adding that talk of a suit was meant as a distraction from CBS Radio's problems.
Stern said he had a meeting with Moonves and CBS Radio chief executive Joel Hollander about three weeks ago to discuss their complaints.
"I said, 'Les, what's going on?"' said Stern. "He said it's nothing personal, it's just business. But ... it is personal."
Stern's move to Sirius, touted more than a year in advance, was seen as a bold bid by the fledgling satellite radio business to attract some of his millions of fans as paying subscribers.
Stern said his move garnered much media attention and CBS added to it, booking him for appearances on its news magazine show "60 Minutes" and "Late Show with David Letterman."
"I made them millions of dollars. If I was hurting them why did they keep me on the air for 14 months?" Stern said. "How can you have it both ways?"
He said he asked Moonves why he did not pull him off the air. "Les said, 'I knew I could sue you later,"' Stern said.
Shares of CBS (Research) fell 1.3 percent on the New York Stock Exchange Tuesday.
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CBS sues Stern for fraud
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