10-22-2012
Most 69 year old's with enough money to last them 5 more lifetimes might decide it was time to sit back, relax and enjoy a few umbrella drinks. From our very unscientific poll of radio executives Tuesday, following Mel's announcement, all were in agreement that there would be no sitting on the sidelines for Mel Karmazin. Liberty Media CEO Greg Maffei will lead a 3-person committee to find Mel's replacement. It was Maffei who made it seem Karmazin was easy to replace only one month ago. Perhaps that had something to do with Mel calling it quits after 8 years running the show.
Karmazin, well-known in the radio industry for his years at CBS, has been with SiriusXM since 2004. When he joined Sirius the company had 700,000 subscribers and was battling for subscribers and content with XM Radio. In 2007 Karmazin lead Sirius through a 17-month long merger with XM Radio. Today the company has 23.4 million subscribers. In late September it was Maffei who told investors at a Goldman Sachs investor conference, "Mel was valuable but not replaceable. I think there are plenty of people who could do a great job running the business." In 2011, SiriusXM produced a profit of $427 and generated $3 billion in revenue.
Karmazin hinted he wasn't real interested in running the company if it was taken over by Liberty. Liberty is edging closer to gaining 50% control of SiriusXM. They are also awaiting regulatory approval from the FCC. When SiriusXM was burdened with a mountain of debt, John Malone came to the rescue. Malone's Liberty Media loaned SiriusXM $530 Million in return for a 40% stake in the company and 5 board seats.
The retirement announcement is not a big surprise, although most analysts who cover SiriusXM and Liberty were guessing Karmazin could have just as easily decided to sign another contract (his current deal expires at the end of 2012). Mel will stay on until February 1st to "ensure a smooth transition." On February 2nd, that everyone will be watching two things; where will Karmazin start his next story and what will Howard Stern do. Investors will be watching the stock on Wednesday. The one-time high-flighing $60 stock is still below $3.00 but year-to-date is up 60%
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