• by Wayne Friedman , March 1, 2006

CBS Radio has sued Howard Stern, its former big-time radio personality, for his almost two years of promoting Sirius Satellite Radio, his new employer, while an employee of CBS.

Citing multiple breaches of contract, fraud, unjust enrichment, and misappropriation of CBS Radio's broadcast time, CBS has filed a lawsuit in Supreme Court of the State of New York. It seeks at least $400 million dollars in damages.

After he made his five-year, $500 million deal with Sirius in October 2004, Stern talked incessantly about his new employer--all of which equates to millions in free advertising/promotional time, says CBS. CBS filed the suit against Stern, his company, One Twelve Inc. his agent, Don Buchwald, as well as Sirius.

Why didn't CBS act against Stern sooner--right after Stern's deal with Sirius was announced? A CBS spokesman didn't return e-mails or phone calls. But one date seems to have triggered CBS's actions--January 6 of this year.

That's when--in addition to Stern's original deal of $500 million--Sirius paid over 34 million shares of stock, valued at $220 million, to Stern and his agent, because Sirius exceeded by certain subscriber targets. Stern and his agent were allowed to take this bonus as a lump sum. CBS says it didn't know about this kicker part of the deal.

"They knew what he was doing for two years," says Los Angeles-based lawyer Cassandra Richey. "The court is going to see this as CBS sitting on their hands for two years. They could have sent a notice to him years ago."

CBS did pull him off the air in November 2005 for a day or so for over-hyping Sirius. But CBS returned him to his show, which ran through mid-December, when his contract with CBS ran out.

CBS claims that because of the $220 million bonus, Stern wasn't just using Sirius as content fodder for his radio show, but that there was a specific advertising/marketing plan for specific financial gains. CBS says this equates to valuable commercial time--worth millions of dollars--that Sirius didn't have to pay for in touting its company. All this financially benefited Sirius as well, in gaining more subscribers.

For his own part, Stern says CBS didn't seem to have a problem with this for the last year and a half, as he appeared on the CBS TV network shows "60 Minutes" and "Late Show with David Letterman."

CBS also says Stern continues to breach his contract by refusing to return recordings of his CBS radio program that CBS says belong to CBS Radio.

Even before the lawsuit was filed yesterday, Stern tried to upstage CBS with a quick news conference in New York City. Stern said his former employer CBS and CBS CEO Les Moonves have a "personal vendetta" against him.

The lawsuit also pits Mel Karmazin CEO of Sirius against Moonves, who reported to Karmazin when Karmazin was president and COO of Viacom Inc.