The Sirius XM CEO isn’t sure that John Malone’s Liberty Media will want him to stay after it owns more than 50% of the satellite radio company’s stock — something that could happen as early as today. “My instincts are that Liberty does not need me,” Mel Karmazin said at the Bank of America Merrill Lynch Media, Communications and Entertainment Conference. “I have historically been expensive…That’s OK with Mel.” But he also says that he’s “open to having a conversation” about staying after. For example, if Liberty decides to spin off Sirius XM then “that would be a situation I might be interested in.” Karmazin says there’s been “no dialogue whatsoever about me coming or going,” including with Sirius XM’s existing board. His current contract expires in December. If he signed a new deal while the company’s future is in flux then “it would look [to shareolders] like I sold out.” READ MORE »
A Florida police pension fund is suing Sirius XM Radio Inc’s board of directors for allowing John Malone’s Liberty Media Corp take over the satcaster without a fight and without paying a premium. Reuters reports the City of Miami Police Relief and Pension Fund filed suit in Delaware Chancery Court following Liberty informing the FCC on Friday that Liberty planned to take full control of Sirius XM by increasing its stake to more than 50%. Provisions under which Liberty invested in Sirius XM in 2009 prohibit the company from fighting off a Liberty takeover, and the police pension fund says this constituts a breach of the board’s fiduciary duties. As part of its investment, Liberty loaned Sirius XM $530 million to help the satcaster avoid bankruptcy. Terms of the loan stipulated that Sirius’ board agreed not to adopt a poison pill or any defense measures against a Liberty takeover after a three-year standstill, which expired in March. Since then Liberty has been buying Sirius shares in the open market to boost its stake above 50%.
The satellite radio company’s shares are up more than 3.6% in pre-market trading this morning after it beat its own projections, and analysts’, for subscriber growth in Q2. Sirius XM says it added …
Howard Stern had claimed his employer owned him additional stock awards for exceeding subscriber targets that would have totaled more than $300 million — targets exceeded when Sirius merged with rival XM Satellite Radio. But Judge …
Earlier this month Sirius XM CEO Mel Karmazin crowed that “things have been great” at the satellite radio company. Its stock is up 23% so far in 2012 and “our free cash flow is growing, it’s extraordinary,” he told CNBC’s Jim Cramer. But Sirius sings a different tune in a new lawsuit that accuses SoundExchange — a clearinghouse authorized by Congress to handle music artists’ royalty payments – and the American Association of Independent Music, a trade group, of leading an “industrywide conspiracy” to raise the fees Sirius pays to air recorded music. The groups’ “unlawful conduct” has “significantly raised Sirius XM’s costs, (and) threatened the viability of its business model in a highly competitive and technologically volatile sector of the entertainment market,” it just told the U.S. District Court in New York. Last year the company spent nearly $200M for royalties to play recordings on the 71 of its more than 135 channels that feature commercial-free music. The fees were set by the government’s Copyright Royalty Board (CRB) in a license that expires this year. Sirius says that SoundExchange has asked CRB to more than double its rates — to a maximum of 20% of the satellite radio company’s gross revenues — for a new license that would run through 2017. Although Sirius acknowledges that it’s growing, it “is far from recovering the enormous capital investment (to build the service) and is just at the point where it it beginning to earn a small profit on its investment.”
The satellite radio company’s shares are up 11.4% since early Thursday while other NASDAQ stocks collectively are down 4.4%. What’s going on? Well, it seems that many analysts who attended Liberty Media’s annual dog-and-pony show for them on Thursday came away convinced that Sirius XM is preparing to see John Malone lift his company’s 40% stake well past 50%. He has to wait until March to avoid taking a tax hit on such a move — and we all know how much Malone hates to pay taxes. After that there’d be a tax advantage: Sirius has $8B in net operating losses that could be used to shelter future payments. That’s great now, although the losses “sucked” when the company was racking them up, CEO Mel Karmazin told Liberty investors at last week’s gathering. So, is Liberty interested in buying Sirius? A lot of comments that Liberty CEO Greg Maffei made last week sure make it sound that way. “There are few businesses that I have as much confidence in,” he said. ”Boy, it’s got a heck of a tail wind behind it. Find me another business” with as much opportunity. Sirius’ first consumer rate hike, coming in January, ”is a great opportunity and there’s a potential for more…(Profit) margins will expand….It’s our kind of business.” He added that his company
Investors seemed to like what they heard at today’s annual confab for John Malone’s Liberty Media. Shares of the hodge-podge of companies it either owns or controls were up on a day when the market was shaken by new fears that the European debt crisis will widen. Liberty Starz ended the day +1% and Liberty Capital was +0.5% after their parent said it will combine the two tracking stocks into a single asset-based security. But Live Nation was +6.7%, Barnes & Noble was +5%, and Sirius XM was +4.8% following CEO presentations to the Street.
Malone was more subdued than usual. But the executive who became a billionaire on the back of his devilishly complex deals — often to help him avoid paying taxes — got a chuckle in his response to a question about whether the changes in his tracking stocks will make their businesses confusing for investors. “We’ll get as complicated as we need to get to highlight value.” he said.
Sirius XM’s Mel Karmazin won the biggest laughs, though, with
UPDATE, 2 PM: The market deteriorated as the day wore on, continuing the worst market slump since 2008. The Dow Jones U.S. Broadcasting and Entertainment Index closed down 7.3% — exceeding the 5.6% decline in the Dow Jones Industrial Average, 6.7% drop in the Standard & Poor’s 500, and 6.9% fall at NASDAQ. CBS’ -10.3% slide made it the leading loser among media’s Big Guns. It was followed by News Corp (-7.7%), Viacom (-7.1%), Comcast (-6.6%), Sony (-6.4%), Disney (-6.1%), and Time Warner (-5.8%).
Double-digit losers include AMC Networks (-12.8%), LIN TV (-12.7%), Sirius XM (-12.7%), RealD (-12.6%), Cumulus Media (-11.9%), TiVo (-11.4%), Entercom (-10.9%), Westwood One (-10.8%), and E.W. Scripps (-10.3%). Those losing at least 9% include National CineMedia, Dish Network, Arbitron, Sinclair Broadcasting, Rovi, Outdoor Channel, Crown Media, Electronic Arts, Cablevision, and Coinstar.
Diane Haithman is contributing to Deadline’s coverage of TCA.
In this year’s first and probably only TCA panel to be conducted in two languages, Cuban-born journalist Cristina Saralegui spoke passionately about leaving her Miami-based Spanish-language show for Univision, El Show de Cristina, after 21 years for a new weekly talk/variety show for Telemundo. The show launches in October in conjunction with National Latino Broadcasting’s The Cristina Channel, a radio network for Sirius XM. Unlike her previous program, the new show, Pa’Lante Con Cristina, which the star will host and executive produce, will make use of translators, subtitles, and whatever it takes to make the show accessible to both Spanish- and English-speaking viewers. “The show will be in Spanglish — in my home, my kids speak both, because I don’t think that you should lose a language,” says Saralegui. Although she made a point of thanking Univision for her 21 years on the air, she blasted its Spanish-only policy when it comes to subtitles, comparing it to the barriers against Latino talent crossing over into the U.S. mainstream. “You do exactly the same thing,” she said of Univision. “Telemundo doesn’t do that. They know better, I’m so happy.”