Karmazin: I’d have sold Viacom but for Sumner
Sirius XM Satellite Radio chief Mel Karmazin on Tuesday stopped by the annual Reuters Global Media Summit to talk about his company, its future and to occasionally go down memory lane on a range of what if’s.
The 68-year old acknowledged that after roughly 50 years in the business he finally realizes that he’s not a good number two. He also proudly noted that he has no aversion to selling a company he leads if the right offer comes along. His track record backs him up on that claim. Karmazin sold Infinity Broadcasting to CBS in 1997, and then CBS to Viacom in 2000, creating enormous wealth for his shareholders in the process.
But there’s one deal Karmazin seemed to regret not having a chance to get done–selling Viacom. He admitted that given the opportunity and presented with the right price he would have sold Viacom when he was in charge. But Viacom’s 88-year old legendary leader Sumner Redstone, who has majority control over both that company and CBS, stayed at Viacom longer than expected. Indeed, Redstone still serves as Viacom’s chairman, outlasting Karmazin, who decamped to SiriusXM after three years of constant clashes with the octogenarian.
“I would have sold Viacom if Sumner wasn’t around,” Karmazin noted candidly. He then smiled wide before adding, “If he went out to lunch I would have sold it.”
Sony’s Sir Howard Stringer makes fun of News Corp hacking scandal
On the same day that James Murdoch was fighting for his career at a parliamentary hearing on Thursday in London, Sony’s CEO Sir Howard Stringer was making fun of the whole situation an ocean away.
At a fancy breakfast hosted by News Corp’s Wall Street Journal in New York (where Sirius XM’s CEO Mel Karmazin was in the house), Stringer was the guest of honor. WSJ editor Robert Thomson kicked off the Q&A session introducing Stringer, who later took the opportunity to show off one of Sony’s new products, a pair of binoculars that can be used to record video or pictures in 3D. That’s when Stringer seized the moment to turn the breakfast into an impromptu roast about News Corp’s woes. Wielding the binoculars, he said:
“These are 3D binoculars. I venture it got good reviews. The Wall Street Journal will equip all their reporters with this. And if you think hacking the Royal Family is fun with phones, this is the ideal device. If you stay at the Hotel InterContinental Hyde Park, you can actually gaze into Buckingham Palace with these. I am telling this to (Thomson), wherever you are. Did you leave already? This is for you. This is for you. Video recording or stills.”
When I caught Stringer on the sidelines after the event, he admitted his stand-up routine “was a bit dangerous.”
Sirius XM: no Howard Stern news today
Fans of Howard Stern hoping to hear whether the shock jock will stay at Sirius XM might be disappointed if they tune into his channels, Howard 100 and Howard 101 Thursday afternoon. The Internet was atwitter after a web report said Stern was set to announce where he was taking his talents once his $500 million contract expires this year.
But Sirius XM denies that there will be any announcement. In fact spokesman Patrick Reilly said TheStreet.com misunderstood CFO David Frear’s comments, during an investor conference, about Stern’s future.
Here’s what actually happened, according to Reilly: Responding to a question about Stern and his contract, Frear asked whether the person was a Sirius XM subscriber. When the inquisitor said “no”, he told her to go out and “buy a radio this afternoon” so she could tune into Stern’s show.
(The web site has since updated its post to reflect the comments from Reilly. But the rumor persists. )
Even if no news comes today, there are still plenty of lingering questions about Stern and Sirius’s future — with or without him.
Here is what Sirius CEO Mel Karmazin said last year about the prospect of negotiations with the radio icon.
from Summit Notebook:
Sirius CEO Karmazin limbers up for the Howard Stern dance
It’s been five years since Sirius lured shock jock Howard Stern to satellite radio with a $500 million contract. Whether Stern can re-up with a similar deal when his contract expires at the end of next year is anyone's guess, but it ought to be entertaining. Sirius XM CEO Mel Karmazin is preparing himself for negotiations with the self-proclaimed King of All Media.
In a meeting with reporters at the Reuters Media Summit on Monday, Karmazin gave us a thumbnail sketch of his version of "The Art of the Deal."
“I could tell you, it will start with Howard feeling that he is working too hard and doing too many shows and not making enough money. Our side would say, 'We want you to do more, and get less money,'” Karmazin said.
“That would be how we would go into the room once the time came to go into the room. And the hope would be that we would come out with Howard staying with our service,” he said.
Karmazin praised Stern as “a talent like no other in radio,” but would not say whether such a talent was still worth a half billion dollars.
“You have to now assume that the negotiations are at a stage where everything is in print, so if I were to say, yes, we got every penny's worth, Howard would come in with that piece of paper and say 'See? I sold myself too cheap,'” he said.
Stern is one of the biggest draws of Sirius XM’s satellite radio service, which counts 18.5 million subscribers. His decision to exit FM radio for Sirius in 2004 is credited with establishing satellite radio as an established form of media, though some analysts have also noted that high-priced contracts like Stern’s contributed to financial woes that pushed Sirius to the brink of bankruptcy earlier this year.
Live blog from the Reuters Global Media Summit
Reuters reporters will be sending live updates from interviews with guests including Disney’s Anne Sweeney, IAC’s Barry Diller, WPP’s Martin Sorrell, Sirius XM’s Mel Karmazin and more.
Better days ahead for Sirius XM?
Sirius XM Radio has reason to be excited about the success of the cash for clunkers program. The satellite radio operator, which posted quarterly results this morning, raised its income outlook for the year on a potential rebound in car sales.
Chief Executive Mel Karmazin said on the earnings call that he was cautiously optimistic that auto industry sales will pick up in the second half of this year.
After all, any increase in car sales translates into more subscribers for Sirius XM, which gets most of its new users from satellite radios built into cars.
Investors have been optimistic about Sirius’s stock all this week, given the launch of its iPhone software and the government’s Car Allowance Rebate System, which lets people trade in their old vehicles for rebates on new, fuel-efficient cars. Reuters’ Franklin Paul wrote on Tuesday:
The U.S. government’s popular “cash for clunkers” incentive program has added spark to the idea that auto sales may rebound after a four-year decline. By allowing people to trade in old vehicles, the program has lifted industry-wide sales back above 11 million units on an annualized basis.
What’s more, Barrington Research analyst James Goss told Paul that Sirius converts about half of its users who get trial accounts when they buy a car into paying customers.
Now, only time will tell whether the optimism lasts, both in the beleaguered U.S. car industry and among Sirius shareholders.
I can’t believe this company is doing very much “right”. I am a perfect example of future churn and lost customer forever. I had a Sirius S50 which failed several times. Sirius sent me a refurb Sportster 4 (with no disclosure or agreement) and included a boom box in the package. I was so impressed I decided to keep the s50 active and paid to have BOTH UNITS. The Sportster also was not dependable, intermittently cutting out for the first 10 or 11 months, and that unit finally quit altogether (I purchased an extra antenna which didn’t help). The S50 had given up the ghost a couple weeks earlier, so I called Sirius. They were not helpful, and I asked if I could just cancel and was told I could, WITHOUT OWING ANY ADDITIONAL MONEY. They deactivated my account, and then BILLED MY CREDIT CARD $66.53; they were obliviously unconcerned when I called them about the failure to disclose this impending charge.Now I’ve bought my wife a new car which has XM installed; MANY soliciting mail and phone calls started right away, but nobody would even listen to my concern that Sirius/XM might not be a company I wanted to do business with because no human being would call me back about that charge. All the high prssure sales persons would do was to repeatedly read from a company “pitch line”, totally ignoring that I wasn’t a happy former customer. I now have one deactivated XM radio in a new car, and two broken Sirius radios in the closed for which I will never trust the service provider enough to do business with.
Sun Valley: The stars align
Allen & Co’s 27th Sun Valley media and technology conference starts on July 7 and ends on July 12. In the meantime, expect media writers to breathlessly report, blog, tweet, photograph and record the event. Why the fuss? There are literally hundreds of people coming who are known to do nothing else than run the universe when it comes to TV shows, movies, telecoms, the Internet and all sorts of other electronic communications. We have lists of all the people who bankroll them as well, along with a list of other interesting people you will find there.
Here, meanwhile, are the big men and women of media and technology who justify the travel budgets that increasingly hard-up news organizations have to put out for your favorite folks in the press corps to hide behind the hedges and hope for a handout that will break news, move markets and excite our editors. Keep in mind: this list is not a guarantee that these people are showing up; it’s just an invitation list (arranged alphabetically by company). We’ll update it as we learn more. (Our boldface names indicate some general viewpoint that they’re the stars of the stars.)
- James McCann, CEO, 1-800-flowers.com.
- Bobby Kotick, CEO, Activision Blizzard Inc. Also Brian Kelly, co-chairman.
- Jeff Bezos, CEO, Amazon.com Inc.
- Tim Armstrong, chairman and CEO, AOL
- Michael Ovitz, AMSEF LLC, former uber-talent agent at Creative Artists Agency and former Walt Disney Co executive.
- Gerhard Zeiler, CEO, RTL Group, Bertelsmann AG.
- Bill and Melinda Gates, of the foundation of the same name. Bill, of course, co-founded Microsoft Corp.
- Mark Vadon, executive chairman, Blue Nile Inc.
- James Dolan, president, CEO, Cablevision Systems Corp.
- Leslie Moonves, president, CEO, CBS Corp. Also Neil Ashe, president, CBS Interactive. Also Quincy Smith, CEO, CBS Interactive. (And a former Allen & Co man.)
- Charlie Rose, interviewer and anchor on the Charlie Rose Show
- Anthony Bloom, Cineworld plc
- Richard Parsons, chairman, Citigroup Inc. Former CEO, Time Warner Inc.
- Lowry Mays, chairman, Clear Channel Communications Inc.
- Ralph Roberts, founder, chairman emeritus, Comcast Corp. Also Stephen Burke, president and COO, Comcast Cable.
- Patrick Condo, president, CEO, Convera Corp.
- Jimmy Hayes, CEO, Cox Enterprises Inc.
- Richard Lovett, president, Creative Artists Agency Inc. Also Bryan Lourd, managing partner.
- Michael Dell, chairman and CEO, Dell Inc.
- Richard Rosenblatt, chairman and CEO, Demand Media. He used to work at MySpace’s parent company before News Corp bought it.
- Chase Carey, former DirecTV CEO and Rupert Murdoch’s new No. 2 man at News Corp.
- John Hendricks, founder and chairman, Discovery Communications. Also president and CEO David Zaslav.
- Jeffrey Katzenberg, CEO, DreamWorks Animation SKG.
- John Donahoe, president and CEO, eBay Inc.
- Dara Khosrowshahi, president and CEO, Expedia Inc.
- Facebook CEO Mark Zuckerberg. (We’ve heard conflicting reports about whether he’ll show. Either way, he’s still on our list.)
- Tom Freston, principal, Firefly3 LLC. Former Viacom executive.
- Martin Varsavsky, CEO, FON
- Jeff Immelt, chairman and CEO, General Electric Co.
- Jeff Zucker, CEO, NBC Universal. (GE)
- Ronald Meyer, president and COO, Universal Studios. (GE)
- Eric Schmidt, chairman and CEO, Google. Also co-founders Sergey Brin and Larry Page.
- Juan Luis Cebrian, CEO, Grupo Prisa. Also Ignacio Polanco, chairman.
- Emilio Azcarraga, chairman and president, Grupo Televisa. Also Alfonso de Angoitia, executive vp.
- Christopher Schroeder, CEO, HealthCentral. Also former CEO of Washingtonpost.Newsweek Interactive.
- Cathleen Black, president, Hearst Magazines.
- R. Todd Bradley, executive vp, personal systems group, Hewlett-Packard Co. Also CEO Mark Hurd.
- Barry Diller, chairman, CEO, IAC/InterActiveCorp. Also chairman, Expedia Inc. Also Victor Kaufman, vice chairman, IAC/InterActiveCorp.
- Lachlan Murdoch, executive chairman, Illyria Pty Ltd. Son of News Corp CEO Rupert Murdoch.
- Craig Barrett, former CEO, chairman, Intel Corp. Also Sean Maloney, executive vp, chief sales and marketing officer.
- Jeffrey Berg, chairman and CEO, International Creative Management. Also president Christopher Silbermann.
- Michael Volpi, formerly of Cisco Systems Inc and Joost.
- Eric Eisner, L+E Pictures. Son of former Walt Disney Co. CEO Michael Eisner.
- Kevin Reilly, CEO, Lamar Advertising Co.
- Michael Fries, president and CEO, Liberty Global Inc.
- John Malone, chairman, Liberty Media Corp. Also Greg Maffei, president and CEO.
- Reid Hoffman, chairman, president of products, LinkedIn Corp.
- Sam Altman, co-founder and CEO, Loopt Inc.
- Craig Mundie, chief research and strategy officer, advanced strategies and policy, Microsoft Corp. Also Robbie Bach, president of the entertainment and devices division, and Henry Vigil, senior vp, strategy and partnership.
- Rupert Murdoch, CEO, News Corp. Also with him is his second son, James Murdoch, chairman and CEO of News Corp’s Europe and Asia operations. Also Jonathan Miller, News Corp’s chairman and CEO for its digital media group. Former president and COO Peter Chernin, whose last day was June 30, is coming along too, in tow with CFO David DeVoe and new MySpace CEO Owen Van Natta.
- Gina Bianchini, CEO, Ning Inc.
- Jorma Ollila, chairman, Nokia Corp.
- Greg Wyler, founder, O3B Networks Ltd.
- Jeffrey Jordan, president and CEO, OpenTable Inc.
- Jeffery Boyd, president and CEO, priceline.com Inc.
- Maurice Levy, chairman and CEO, Publicis Groupe.
- Paul Jacobs, chairman and CEO, Qualcomm Inc.
- Robert Johnson, founder and chairman, the RLJ Companies.
- Jay Y. Lee, Samsung Electronics Co. Ltd.
- Kenneth Lowe, chairman, president and CEO. Scripps Networks Interactive.
- Mel Karmazin, CEO, Sirius XM Radio Inc.
- Max Levchin, CEO, Slide Inc.
- Sir Howard Stringer, chairman and CEO, Sony Corp. Also Kazuo Hirai, president of networked products and services group; Robert Wiesenthal, executive vp and CFO, Sony Corporation of America; Michael Lynton, chairman and CEO, Sony Pictures Entertainment; Hiroshi Yoshioka, executive deputy president, president of consumer products and devices group; and Nicole Seligman, top lawyer.
- Nick Grouf, CEO, Spot Runner Inc.
- Thomas Glocer, CEO, Thomson Reuters Corp, along with Niall FitzGerald, deputy chairman.
- Michael Eisner, the Tornante Company LLC. Former Walt Disney Co CEO.
- Lars Buttler, CEO, Trion World Network Inc.
- Evan Williams, co-founder and chairman, Twitter Inc.
- David Levin, CEO, United Business Media plc.
- James Berkus, chairman, United Talent Agency.
- Brad Grey, chairman and CEO, Paramount Pictures Corp (Viacom).
- Sumner Redstone, chairman, Viacom. Also Philippe Dauman, president and CEO.
- Jean-Bernard Levy, CEO, Vivendi.
- Robert Iger, president and CEO, Walt Disney Co. Also Thomas Staggs, CFO.
- Edgar Bronfman Jr, chairman and CEO, Warner Music Group.
- Donald Graham, chairman, CEO, The Washington Post Co.
- Casey Wasserman, chairman and CEO, Wasserman Media Group LLC.
- Harvey Weinstein, co-chairman, The Weinstein Co.
- Shelby Bonnie, CEO, Whiskey Media LLC.
- Jim Wiatt, William Morris Endeavor.
- Terry Semel, chairman and CEO, Windsor Media. Former Yahoo CEO.
- Martin Sorrell, CEO, WPP.
- Anne Mulcahy, chairman, Xerox Corp.
- Jerry Yang, chief Yahoo.
- Mark Pincus, founder, CEO, Zynga Inc.
Nick Grouf can teach on how to screw over your employees and your investors while walking away with several million dollars. maybe he can do a secondary seminar about “pump and dump” schemes. Nick is a fraud
Sirius: Rumors of our near death? It was the media’s fault
It’s the media! That’s what Sirius would have us believe.
On a post-earnings call on Thursday executives said the company’s precarious financial position during the last few months as it sought to resolve a looming debt debacle was exacerbated by the media’s interest in Sirius. Apparently, stories about companies going bust not only upset investors and creditors, but customers too.
Sirius XM President of Operations Jim Meyer told Wall Street analysts he’s excited to have completed the debt refinancing and merger between Sirius and XM so the company can assure customers it will be around for a while.
There certainly was headwind associated with both the confusion of putting the two companies together and the overall just unbelievable amount of news and press that we have seen really in the fourth quarter and continuing in January and February on the financial condition and refinancing of our balance sheet.
CEO Mel Karmazin agreed:
It’s particularly sensitive for us because people prepay their subscriptions in large part. So the idea of all of the noise in the market certainly when you are asking somebody to prepay and buy a year in advance or something like that, obviously has an impact.
Sirius will be around for a long time. Even with new devices coming out, and car companies installing devices to make listening to music easier, Sirius has the core infrastructure allowing them to produce new ways of “listening” to radio.
This stock is going back to $9. It may not be tomorrow, but once their debts are paid up, profits will be right behind. 20 Million Listeners are not going to just throw in the towel.
BUY BUY BUY
Dish’s Charlie Ergen: Me and Mel don’t have a beef
Ah the media, we love a ruckus. We really do. And when the two pugilists are characters as colorful and savvy as Dish Network’s founder Charlie Ergen (left) and Siriux XM Satellite Radio CEO Mel Karmazin (right) we do really get excited.
If you remember, Ergen was widely reported last month to have made a back door bid to take a stake in Sirius XM by quietly buying up some of the satellite radio company’s outstanding debt. Analysts and experts came up with all kind of theories as to Ergen’s ambitions including taking complete control of Sirius on the cheap, combining various satellite assets, and kicking Mel out.
At the time Ergen ‘s official channels at Dish and EchoStar declined to comment on the matter. So today’s Dish earning call was the first time we heard from the man himself on the matter. Well, it turns out the press was right on most things connected with the Sirius bid, according to Ergen. Except for one thing: he does not have bad blood with Sirius CEO Karmazin.
Here’s Ergen from the conference call:
I would take this opportunity to say one thing that clearly was not true is there wasn’t, at least I can speak for my end, there’s no annimosity toward Mel, Parsons [former XM chair] or anything like that.
I don’t know where they got that. Certainly not from our side.
Really?
Maybe the stories of an old feud were overplayed, but there might have something other than pure cold financial logic that influenced Mel’s final decision on this deal. Liberty Media beat Ergen in the bid for a stake in the beleaguered satellite radio business by offering to pay off Sirius’ due loans. In an interview with Reuters shortly after winning the Sirius bid last month, Liberty Media CEO Greg Maffei implied there may have been some… ahem, personality issues in its favor.
Liberty: Stern is safe — for now
So after two weeks of following all the twists and turns of Sirius XM’s attempts to avoid bankruptcy, CEO Mel Karmazin decided on John Malone, founder of Liberty Media, to come in as Sirius XM’s white knight with a $530 million loan . The loan will cover the satellite radio provider’s looming debt and help it avoid bankruptcy. As part of the deal Liberty will eventually take a 40 percent stake in Sirius’ equity.
But does this mean the big money deals that Karmazin signed with the likes of Howard Stern, Oprah Winfrey and Major League Baseball will get re-worked at a more favorable rate for the company now that there’s a new major stakeholder?
No, says Liberty Media CEO Greg Maffei in an interview with Reuters.
You can look and say some of these content deals were cut at a time when there were two guys (Sirius and XM) bidding against each other in a relative frenzy. Having said that, a lot of these content relationships like Howard Stern are very valuable to this company, have been important in building the company, and are likely to be important in sustaining it.
But Stern isn’t quite out of the woods.
I’ll rely on Mel and his team to think about how those content relationships look going forward and make the right decisions,” said Mafffei. “All those content (deals) have some term and they’ll get renegotiated or reset at that time for the value that they’re then creating.
With Sirius generating net operating losses which hit $217 million in the third quarter, it would make sense that Liberty might suggest that Karmazin looks at trimming one of its biggest outgoing cashflows: talent costs. But Mafffei seems not to agree.
I too would probably dump SiriusXM without Stern. That said, I do love the music channels and also tuning into Foxnews during breaking news. It would be harder without Stern.
