The only thing riskier than being an enemy of Liberty Media’s John Malone is to be his friend — as Sirius XM’s Mel Karmazin is discovering. They developed a corporate bromance in 2009 when Malone rescued the satellite radio company as it struggled to keep up with its debt payments: Liberty invested $530M, and received preferred stock convertible into 40% of Sirius’ voting shares. But Sirius has just disclosed that Malone quietly asked the FCC this month to give his company — in Liberty’s words — “de facto control of Sirius XM Radio Inc.’s earth station licenses.” It seems that Malone, one of the media industry’s toughest negotiators, believes Liberty is entitled to take charge with the March 6 expiration of some conditions in the 2009 agreement that limited its ability to buy additional Sirius shares. Liberty’s filing set off alarm bells in Karmazin’s shop. Late Friday, Sirius asked the FCC to dismiss or deny Liberty’s petition. The satellite company says that Liberty’s application has technical problems that should disqualify it — and it’s about corporate governance, not a matter for the FCC. But just in case the FCC wants to take on the matter, Sirius says that Liberty is wrong about the investment agreement. It only entitles Malone to pick five of the 13 board members, not a majority. And although conditions barring Liberty from buying additional shares have expired, it hasn’t bought them yet. “Liberty Media now can seek to control the management, board of directors or policies of Sirius XM, but it has not done so, nor has it proposed to do so,” Sirius says. “Simply stated, Liberty Media currently does not control Sirius XM.” At least not yet.


If it weren’t for auto sales, this company wouldn’t exist. It’s an antiquated technology employed by an out-of-touch company being lead by a CEO who don’t understand nor comprehend the nature or future of radio in the 21st century. Karmizin has been terrible for the company.
It is a crazy expensive way to get “everywhere” live radio into a car, but it is also the only way. Not that it’s much a business model. You might as well be selling it to sailboats. Most people drive to and from work and listen to mp3s or FM radio.
My problem with Sirius is that it keeps getting more trashy, repetitive programming and siphoning off spectrum to other projects. I hear the XM component is slightly more classy.
As for technology, there is not enough cellular OR WiFi OR satellite spectrum for everyone to watch on-demand TV on their iPads. The question is whether people will accept pre-loading their content rather than picking it up streaming. That’s iTunes, but look how popular streaming remains.
The Washington Post today had curmudgeonly column about “hey, what about TV?” “Your iPad is a gig-pig, what about television?” You can plug it into any socket in the house and watch! Amusing, in a confusing sort of way.
You described the situation completely. Sirius has benefited from auto sales alone. Karmazin ushered in the death of terrestrial radio and is instituting the same business principles in satellite. The worst radio exec in history