Note to Sirius XM CEO Mel Karmazin: When you talk to anyone besides Wall Street analysts, don’t sound so gleeful about your plan to raise your basic $12.95 a month subscription rate later this year. Karmazin told analysts Tuesday in his quarterly earnings call to “think of a number more than” the inflation rate so Sirius can recoup some of the huge payments it’s been making for the NFL, Howard Stern, and other programmers. Karmazin is salivating for the end of July and the expiration of the 3 year moratorium on price hikes that he promised the FCC he’d make in 2008 when regulators allowed Sirius and XM to merge into a satellite radio monopoly. The freeze is widely expected to end, although there’s been some talk at the FCC about possibly extending it. Government officials have allowed Sirius XM to pass along higher fees to cover music royalty payments and for special services including Internet access. Karmazin is in no position to plead poverty, especially as the economic recovery helps auto sales — Sirius XM’s biggest suppliers of new customers. The company reported net profits in the first quarter of $78 million, up nearly 86% vs. the same period last year, on revenues of $724 million, up 9%. Profits, at 1 cent a share, matched what Wall Street analysts expected. Sirius also reported that it had nearly 20.6 million subscribers at the end of March, up from 20.2 million at the end of 2010. The company says it expects to add 1.4 million customers in 2011, and raised its cash flow forecast for the year. Karmazin says he would have projected even better results for 2011 but wants to see first whether Japanese auto makers will have to slash production as a result of the recent earthquake and tsunami.
By DAVID LIEBERMAN, Financial Editor | Tuesday May 3, 2011 @ 9:43am EDTTags: FCC, Sirius XM Radio, Sirius XM Satellite Radio
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This article was printed from http://www.deadline.com/2011/05/sirius-xm-ceo-mel-karmazin-vows-big-consumer-price-hike-if-the-fcc-allows-it/
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