Martha Stewart Reaches Deal to Create Her Own Channel on Sirius Satellite Radio

04-18-2005

NEW YORK (AP) -- Six weeks after being released from federal prison, Martha Stewart has reached a deal with Sirius Satellite Radio Inc. to create a 24-hour channel featuring cooking, gardening and entertaining programming for women.

Coming on the heels of separate deals to create a version of "The Apprentice" and a daily cooking show, the four-year agreement announced Monday with Sirius marks Stewart's latest move to rebuild her business after serving time for lying to the government about a stock sale.

"I don't know about you, but I was raised on the radio," Stewart said, smiling broadly during a news conference in New York.

"I'm very excited about this," she said. "Of all the things that I have done in the last few years with Martha Stewart Living Omnimedia, radio is actually one of the most enjoyable."

Stewart said she had liked her 90-second "Ask Martha" radio segments. She said she didn't have to worry about makeup or wardrobe while doing radio.

For Sirius, the deal with Stewart is the most recent effort to compete with its much larger rival in the emerging satellite radio business, XM Satellite Radio Holdings Inc. Earlier this month XM reported that it had 3.8 million subscribers, while Sirius' most recent subscriber count was 1.2 million.

Both Sirius and XM are still suffering deep financial losses and are spending aggressively to lure customers to their services, which cost $12.95 a month and require the purchase of special receiver units, which can only receive either Sirius or XM signals. Both Sirius and XM offer dozens of commercial-free music channels as well as numerous talk channels, many of which carry advertising.

Stewart's channel will also carry advertising. The companies declined to provide other financial details other than to say the arrangement would last for four years.

The companies did say that Stewart herself would also appear on the channel, which was expected to be called Martha Stewart Living Radio.

Last week Stewart appeared at a magazine industry awards ceremony as two magazines published by her company, Martha Stewart Living Omnimedia Inc., won honors for design and general excellence.

Two TV deals involving Stewart were also announced in the past few months, while she was still in prison: a daily cooking show was announced in December, while the "Apprentice" show was unveiled in February.

Last year Sirius signed a five-year, $500 million deal to broadcast Howard Stern's show beginning in 2006, and XM reached a $650 million deal last fall with Major League Baseball. Last week Sirius also said it would launch a weekly talk show with former U.S. Senator Bill Bradley.

Scott Greenstein, the head of entertainment and sports programming at Sirius, said that Stewart's channel would "provide women with the definitive complement to their lives and lifestyle."

Chance Patterson, a spokesman for XM, said that his company had spoken with Stewart's representatives but declined to make a deal with her.

"We evaluated this deal and passed on it, particularly given what we felt was a limited ad revenue return for our investment," Patterson said. "We were more interested in doing a show. We didn't feel it justified doing a whole channel."

Sirius' shares rose 12 cents or 2.3 percent to $5.27 in brisk trading on the Nasdaq Stock Market Monday morning, while XM's were off 30 cents or 1.1 percent at $27.20, also on the Nasdaq. Marth Stewart Living Omnimedia's shares rose 84 cents or 4.3 percent to $20.41 on the New York Stock Exchange.