'SHOCK JOCK' STERN HEADING TO SATELLITE RADIO.

Byline: Evan Pondel Staff Writer

``Shock jock'' Howard Stern said Wednesday that he will move his popular FM radio talk show to Sirius Satellite Radio in a five-year, $500 million deal that would free him from regulatory static.

After years of heavy scrutiny from the Federal Communications Commission and the biggest radio fines ever imposed, Stern jumped from Viacom's Infinity Broadcasting to satellite radio - a subscription-based format that provides listeners with more than 120 channels, mostly commercial-free. New York-based Sirius will begin broadcasting Stern in January 2006, providing its listeners - now numbering 600,000 but likely to soar - with access to the No.1 talk show for 18- to 49-year-old males as well as other Stern-created programming.

``This is like Pinocchio finally becoming a boy,'' Stern told his morning drive-time audience Wednesday. ``This is the culmination of my career.''

Later in the day, he told The Associated Press: ``This starts the avalanche. One of radio's highest earners, one of its innovators, is kissing terrestrial radio goodbye.''

Stern is expected to earn about $20 million a year in salary and stock with the rest of the package going to his staff and for production costs.

The move is even more momentous for satellite radio.

Since its birth nearly five years ago, the format has struggled to entice AM/FM listeners. Access to Sirius requires a subscription for at least $12.95 a month and a radio equipped with a satellite receiver. These barriers have ultimately hurt the company, which has lost about $1 billion since 1999, but shares soared on disclosure of the Stern deal.

``There's no doubt that we believe Howard Stern will be great content for the company. But they are paying him $500 million. That's a huge amount of money,'' said Sean Butson, an analyst with Legg Mason Wood Walker. ``And while Sirius believes it will need one million subscribers to break even on the deal, we feel they will need a lot more.''

Sirius' competitor is XM Radio, which recently added Opie & Anthony and former National Public Radio anchor Bob Edwards to its mix. The Washington, D.C.-based company overshadows Sirius with almost 2 million more subscribers.

``Stern is the Madonna of radio. He reinvents himself every few years,'' said Don Barrett, publisher of Valencia-based industry tracker LARadio.com. ``And I think the timing is right for Stern and Sirius. He has always been an innovator and not a follower.''

The question is whether Stern's fans will follow him to Sirius. Only about 40 percent of those who walk into retailer Alan Graham Motoring in Canoga Park know about satellite radio. And those who do almost always ask for XM instead of Sirius, said Jonah Rosner, a sales associate.

``XM is known for having more music. And Sirius is more talk-oriented. Our customers usually want more music than talk,'' he said.

But those who ordinarily listen to music might find Stern irresistible via satellite. The talk-show titan does not intend to alter his show, although the profanity bleeps will no longer interrupt his broadcast and will not be restrained by the FCC, which does not have jurisdiction over satellite radio or cable television.

``And I think a million of our friends will come over and hang with us on satellite. I hope,'' Stern said Wednesday morning.

Functioning like cable companies, XM and Sirius must persuade customers to pay for a service they're used to getting for free. Most of satellite radio's channels are commercial-free and its broadcasters aren't subject to decency standards governing traditional radio. Sirius also delivers broadcasting to satellite-TV subscribers through Dish Network.

Both companies bounce their signals off satellites. Because they don't have to buy space on the broadcast spectrum, as traditional broadcasters do, the companies are able to send out more than 100 different channels.

``And, in many ways, Stern's move solidifies the presence of satellite as another alternative to AM/FM. This is just a natural extension of the broadcast band,'' said Adam Jacobson, radio editor at Radio & Records, a Los Angeles-based trade publication. ``A lot of people are talking about how Stern will make Sirius a winner.''

Among those people is Joseph P. Clayton, chief executive officer of Sirius. Clayton said in a statement that when you look at Stern's enormous fan base, ``all we need is for Howard to bring in a small fraction of his weekly audience for this agreement to pay for itself.

``And anyone who knows Howard, and who understands how loyal his fan base is, will not have a hard time seeing the incredible potential for growth he will represent for Sirius.''

Barrett of LARadio believes that if Stern can't do it, no one can.

``Every few years Howard pulls the pin on the grenade. And just hearing his passion and love affair for radio will continue to accelerate his carrier on satellite,'' he said.

Shares of Sirius gained 52 cents, or 15.5 percent, to close at $3.87 Wednesday on the Nasdaq market. Viacom shares rose 27 cents, to $36.18, on the New York Stock Exchange.

Evan Pondel, [phone]

evan.pondel(at)dailynews.com

CAPTION(S):

4 photos

Photo:

(1 -- color) STERN

(2 -- 4 -- color) How satellite radio works

(A) Satellites broadcast the signal, which can be picked up by (B) car radios and in some cases, (C) home radios using small antennas about the size of those used by cellular phones. The signal is receivable regardless of geographic conditions. Subscribers receive about 100 channels of digital- quality, commercial-free radio.