XM signs 3-year, $55 million deal with Oprah

updated 12:25 p.m. ET Feb. 9, 2006

NEW YORK - Oprah Winfrey has signed a three-year, $55 million deal with XM Satellite Radio Holdings Inc. to launch a new radio channel beginning in September, Winfrey and XM announced Thursday.

The new channel, “Oprah & Friends,” will air programming on fitness, health and self-improvement topics with personalities that appear on Winfrey’s TV program, “The Oprah Winfrey Show,” as well as in O, The Oprah Magazine. It will also feature a weekly radio show with Winfrey and Gayle King, a frequent guest on her TV show.

The $55 million deal is a far cry from the five-year, cash-and-stock deal that rival satellite radio-broadcaster Sirius Satellite Radio Inc. has with morning shock jock Howard Stern. Originally worth $500 million when it was signed in 2004, Stern’s deal is now worth $600 million due to appreciation of Sirius’ stock price. XM also has signed other big programming contracts, including an 11-year, $650 million deal for Major League Baseball.

Winfrey’s new channel on XM will feature personalities that appear on her show and in her magazine including Bob Greene, Dr. Mehmet Oz, and Nate Berkus.

The Winfrey news and an unrelated positive analyst report helped send XM’s shares up sharply in heavy trading on the Nasdaq Stock Market Thursday. Sirius’ shares, also on the Nasdaq, were struggling.

XM and Sirius are locked in a fierce competition to sign up programming and new subscribers as they both strive to reach profitability. Each service costs about $13 a month and offers dozens of channels of commercial-free music as well as other channels of talk and news.

XM, which is based in Washington, D.C., is the larger of the two, with more than 6 million subscribers, while the New York-based Sirius has more than 3 million.

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