Sirius CEO: This Sucks
by John Paczkowski
Posted on November 11, 2008 at 3:33 PM PT
To hear tell from Sirius XM CEO Mel Karmazin, there was a lot to be happy about in the the troubled satellite radio provider’s third-quarter results–its $4.88 billion loss excluded, of course.
During a conference call to discuss the company’s horrifically bad financials, Karmazin described Sirius’s performance as “impressive,” considering the current economic climate. “It is very impressive that with severely declining auto sales, high unemployment and a generally weak economy, that our revenue grew 16 percent on a pro forma basis in the quarter,” Karmazin said, stressing the company’s 17 percent increase in revenues. “Many other good companies are not growing as a result of the issues in the U.S. economy. So we believe showing double-digit growth to be very impressive, especially if you compare SIRIUS XM’s results to other media and entertainment companies.”
Sure. Thing is, most other media and entertainment companies don’t have almost $1 billion in debt that comes due next year. Nor are they so reliant on the auto industry, a key driver of new satellite radio subscriptions. So perhaps Karmazin’s most apt, and honest, statement on Sirius’s (SIRI) current plight was this one, delivered a bit later in the call.
We think the environment sucks. It is not like we’re doing something wrong. It is that, unfortunately, we do not have a whole lot of control over what cars are getting sold. We do our best.”
Comments
It doesn’t help that it took the FCC 18 months to approve the merger. That is 18 months NOT focused on delivering value to customers, but trying to explain to the FCC why this merger will not produce a monopoly. Perhaps the FCC never heard of the internet, or AM/FM radio, so did not know that two real competitors already existed!
P.S. I run a small business ( http://www.maysoft.com/ ), and if I spent 18 months distracted like this, I would have NO earnings to report!
Posted by Frank Paolino at November 12th, 2008 at 6:49 amThe FCC held up this merger costing us millions. The stock has dropped below the horizon and yet Mel still holds faith that we will be profitable again. He isn’t there with his hand out saying help me or my company will go under while spending tax dollars on executive retreats. He is just going to fix it. That’s what good CEOs do. They do their job. Mel 2012!!!!!!!!!!!
Posted by Kevin Casey at November 12th, 2008 at 7:16 amI have a question for Mel K.
What do Sirius shareholders have to be happy about? It seems the pps took a nosedive ever since you became CEO. You’ve said or done nothing against the onslaught of negative attacks instigated by a horde of anti-SatRad lobbyists. Mel, you vainly promoted Sirius on the Mad Money program and told viewers to purchase Sirius shares. Mel, you and your IR department told shareholders that the company was solid enough and that a reverse split was not anticipated. Mel, quit blaming the economy and start taking charge.For starters, you paid entirely too much for a contract with Howard Stern, so begin with retracting his salary and follow through with the rest of your hired talent.
Posted by paul guillen at November 12th, 2008 at 12:55 pmMel, you really need to stop creating a Clearchannel on the sattellite. When I first started using XM the stations were great, programming great, selection great and now that the merge has taken effect 3 of my favorite channels are gone. These things are the reason that your shares and subscriptions are falling. I can hear most of the same programming on the terrestrial stations, only difference is the lack of commercials on the music stations. You guys are really making a lot of people angry. I say bring back the channels that were cancelled after the merger and you willget some of the subscribers back.
Posted by Charles Scott at December 13th, 2008 at 8:26 pm