“There would be no question that I would be perfect to run it,” Karmazin said. “But there is no chance that I will ever take another job outside of Sirius XM. I just renewed my contract. It’s exactly what I want.”

Exactly what he wants, except maybe for that perennially-under-a-dollar share price–though according to Karmazin, that’s going to change. “I think today, you’ll start to see quarter after quarter of growth,” he said. “You’ll see us making free cash flow. You’ll see us with…over $2.5 billion of revenue. We’ll start to make money, and we’ll start to keep investing in content. And I think our future will be great.”

Unassuming guy, that Karmazin…

Absent one-time charges, the company broke even for the quarter. Analysts had been expecting a two-cent loss on revenue of $609 million.

Good news, but it was tempered with a bit of bad. Because Sirius’s (SIRI) subscriber growth is slowing. The company ended the quarter with 18.5 million total subscribers. That’s up 103,000 from the second quarter, but down 2.1 percent from a year earlier.

“We are very pleased with what we accomplished during the third quarter, especially when considering the macroeconomic issues affecting consumers and the auto industry,” Sirius CEO Mel Karmazin said in a statement.

“We managed to grow revenue, grow ARPU, reduce operating costs, increase adjusted income from operations significantly, and refinance higher cost debt,” Karmazin added. “We look forward to continuing this performance. We grew subscribers and improved churn in the quarter, and we are well positioned to take advantage of an economic rebound. We expect to grow subscribers, revenue, and cash flow next year regardless of the magnitude of any recovery.”

So the question now is: Will Sirius now move ahead with the reverse split its stockholders approved back in May?

Dubbed SkyDock, the $119.99 peripheral uses iPhone OS 3’s support for third-party hardware to transform Apple (AAPL) handsets into full-fledged satellite radios. Designed to run off a car’s cigarette power adapter, the SkyDock charges your iPhone while you listen to it. It works in concert with the Sirius/XM iPhone app and supports the ability to tag songs for download from iTunes. Better yet, it gives users access to all XM and”The Best of SIRIUS” channels, even those the company infamously excludes from its online feed, like Howard Stern, MLB Play-by-Play and NFL Play-by-Play.

A wise move for Sirius and one that will no doubt go over quite well with folks who are interested in listening to its programming, but unwilling to pay for a full sat-radio upgrade to do so. No word yet on a firm release date. The device has, however, been granted preliminary approval by the FCC which is still evaluating it.

Below, the official release:

SIRIUS XM RADIO INTRODUCES THE FIRST DEVICE TO RECEIVE LIVE SATELLITE RADIO CONTROLLED BY THE iPOD TOUCH AND iPHONE

XM SkyDock™ allows customers to enjoy live XM and “The Best of SIRIUS” in their vehicles using the iPod touch or iPhone

NEW YORK–August 26, 2009–SIRIUS XM Radio (NASDAQ: SIRI) today introduced XM SkyDock, the first satellite radio controlled by an iPod touch or iPhone. The XM SkyDock is also one of the first products to take advantage of the new hardware control capabilities of iPhone OS 3.0.

Designed for easy use through the existing vehicle audio system, SkyDock has a built-in XM tuner controlled by a free App that users download from the App Store. The App allows control of the XM tuner using the capabilities of the iPod touch or iPhone Multi-Touch user interface. SkyDock will also charge iPod touch and iPhone devices while listening to live satellite radio.

“XM SkyDock will allow millions of users to add live SIRIUS XM Radio capability to their iPod touch or iPhone while in their vehicle,” said Bob Law, Group Vice President and General Manager, After Market Division, SIRIUS XM Radio. “XM SkyDock makes their favorite programming from XM and ‘The Best of SIRIUS’ available to iPod touch and iPhone users anywhere they drive, coast to coast.”

Listeners can use their iPod touch and iPhone to listen to all their favorite sports, talk, news, entertainment and commercial-free music programming, including Oprah Radio, MLB Home Plate, the PGA TOUR Network, Opie & Anthony, Bob Edwards, Jamie Foxx and Blue Collar Comedy. For the first time, subscribers can also listen to the complete “Best of SIRIUS” package, including Howard Stern and his two 24/7 channels, Martha Stewart Living Radio, SIRIUS NASCAR Radio, sports play-by-play and the Playboy Radio channel, all controlled by the iPod touch and iPhone.

Listeners can also tag songs they hear on XM’s music channels for later purchase from the iTunes Store–including songs on XM’s 24/7 artist branded commercial-free channels such as Jimmy Buffett’s Radio Margaritaville, Elvis Radio, Eminem’s Shade 45, The Grateful Dead Channel, B.B. King’s Bluesville, Willie Nelson’s Willie’s Place, Siriusly Sinatra and Bruce Springsteen’s E Street Radio. Other features include game alerts and sports ticker, artist and song alerts as well as a stock ticker.

The XM SkyDock is a perfect companion to the SIRIUS XM Premium Online App, which allows subscribers to receive SIRIUS XM’s Premium Internet service on their iPhone and iPod touch when they are out of the vehicle and on-the-go, at home, or at the office.

XM SkyDock comes with SIRIUS XM’s patent-pending PowerConnect™ technology, which simplifies Do-It-Yourself vehicle installation, working through the existing vehicle radio and making it easy to move from vehicle to vehicle. An Aux In Cable is a standard in-box accessory to facilitate Aux In connections in vehicles with Aux In capability. SkyDock’s flexible stalk optimizes the iPod touch or iPhone placement in the vehicle. Customers can view the touch-screen interface in portrait or landscape modes. Accessories include Magnetic Mount Antenna and spacers to accommodate the various iPod touch and iPhone product generations.

XM SkyDock is compatible with iPod touch (1st generation), iPod touch (2nd generation), iPhone, iPhone 3G and iPhone 3GS. All models require iPhone OS 3.0 or later.

XM SkyDock will be sold in stores and will also be available at www.shop.xmradio.com with an MSRP $119.99 in fall 2009. The XM SkyDock App will be available at the same time.

This device has been granted preliminary approval by the Federal Communications Commission but is still undergoing evaluation by the Commission.

For more information on XM, please visit www.xmradio.com.

US Music Royalty Fee Overview
As an ongoing part of our business, SIRIUS XM must pay copyright music royalties to music companies and music publishers. These royalties have risen dramatically over the past few years, as a result of decisions of the Copyright Royalty Board (CRB). SIRIUS XM has tried to keep these fees as low as possible but in the end, the company has very limited influence over these payments. The FCC decision approving the merger between SIRIUS and XM allows the company to pass through to Subscribers any federally mandated increases in music royalties that we must pay, since March 20, 2007. The FCC decision allows us to pass through this fee increase to our Subscribers and the company has chosen to do this with the U.S. Music Royalty Fee.

The US Music Royalty Fee will be applied to all music subscriptions that SIRIUS XM offers. The fee will be implemented on July 29th, 2009. The existing Subscriber base will receive this fee on their first billing after this date. The fee will be applied to all satellite plans with music content on a Monthly, Quarterly, Semi-Annual and all Annual Savings Plans. Lifetime Subscribers, who have purchased prior to July 29th, will never receive the US Music Royalty Fee. Since the online products are not satellite based they will not incur the U.S. Music Royalty Fee. Once the fee is introduced on July 29th, any new activation or conversion will include the fee. As we go through this training, you will gain a better understanding of how this fee is applied and how to explain it to the Subscribers. We will be going through different scenarios so you can understand why we are passing this fee onto our Subscribers, how to diffuse irate Subscribers, and how the Subscriber can truly benefit by adding longer term plans.

FAQ

Below are examples questions you may receive from Subscribers regarding the US Music Royalty Fee. Use Answers below (as verbatim) when answering questions about why there is a US Music Royalty Fee or costs associated with the US Music Royalty Fee.

What is this US Music Royalty Fee?
Unlike land based radio, both SIRIUS and XM are required to pay copyright music royalties to recording artists, musicians and recording companies who hold copyrights to lyrics and music.

Why are you increasing your price?
We are not increasing our base price which will remain at $12.95/month for most Subscribers.

Why are you charging me this fee?
US Music Royalty rights were established by Congress and are a product of the copyright ACT, the copyright royalty board which sets the rates SIRIUS XM must pay the music industry has increased the rates dramatically. Unfortunately we can no longer absorb these increased costs.

Who makes up the Copyright Royalty Board (CRB)?
The Copyright Royalty Board consists of three Copyright Royalty Judges who determine rates and terms for copyright statutory licenses and make determinations on distribution of statutory license royalties collected by the United States Copyright Office of the Library of Congress. The Board, made up of three permanent copyright royalty judges, was created under the Copyright Royalty and Distribution Reform Act of 2004, These administrative judges are appointed by the Librarian of Congress

Why does it cost so much?
The Copyright Royalty Board which sets the rates SIRIUS XM must pay the music industry have increased the rates dramatically. Unfortunately the Company can no longer absorb these increased costs and must pass them on to subscribers as a US Music Royalty Fee. Is there any way to avoid this charge? Absolutely, for our Subscribers who previously purchased a long term plan, we will continue to absorb these costs until the next renewal date. If you renew and extend your current subscription before July 29, 2009 we will continue to absorb these increased royalty costs until your next renewal date. I can tell you about some our great savings plans.

FCC Ruling stated you can’t raise your price, why are you doing it?
This fee is consistent with our commitment not to raise the base price of specific service plans for three years after the merger. The FCC did however permit us to add this fee to our price beginning July 29, 2009.

How does this relate to the March Increase?
It is unrelated; the US Music Royalty Fee is to recover royalty cost increases that are outside of the control of SIRIUS XM.

I just locked in for MRD, why are you increasing it again?
If you purchased a multi-month plan to lock in a lower price or to retain free streaming, the US Music Royalty Fee will not affect you until the next renewal date for the Plan you purchased.

Who gets the money?
The US Music Royalty Fee will be used to offset payments from SIRIUS XM to the music industry.

Do you foresee any changes in the fee?
The Copyright Royalty Board sets the fees that SIRIUS XM is required to pay. The fee is expected to increase by one half percent per year through 2012.

Why did you decide to charge a US Music Royalty Fee rather than adding the increase to the subscription fee?
The FCC order requires that we detail the royalty increase for our Subscribers.

Why is the US MRF taxed?
Under applicable tax regulations, it has been determined that the US MRF is a taxable charge.

I only listen to news and talk radio, so why should I be charged the US MRF?
I understand, however, it would be impossible to calculate the US Music Royalty Fee based on individual listening patterns of our Subscribers.

You recently increased the price of my second radio by $2.00. Now you are adding a US MRF of $.97. Isn’t this too much?
The discounted second radio price of $8.99 is still a 30% savings over our standard fee. The addition of a US Music Royalty Fee is necessary due to the dramatic increase in royalties that we have been forced to pay the music industry.

Was I paying this fee previously as part of my subscription price and now am I paying for it separately?
Until July 29, 2009 the FCC required SIRIUS XM to pay the royalty increases, however the order provided the ability for us to pass along these royalty cost increases beginning July 29, 2009.

If I have an A La Carte subscription am I only paying the fee on the music channels?
That’s a great question, SIRIUS -XM is obligated to pay the US Music Royalty Fee based on the content available in packages, unfortunately we are not able to customize the fee for individual Subscribers.

Is there a way to reduce this cost–can I switch my subscription package to mostly music
You may switch to a mostly music package, which will save you $.45 a month in US Music Royalty Fees, but if you do that, you will be giving up over xx channels (different for SIRIUS and XM) of great programming. However, let me tell you about some of our great savings plan which will allow you to delay the US Music Royalty Fee for the term of that plan.

I have an online radio subscription; do I pay a royalty fee on that?
No, the music royalties associated with satellite delivery and internet delivery of music content are different. The royalties associated with internet listening is absorbed in the subscription price.

I have 2 subscriptions a Best of and a SIRIUS Everything why is the fee the same on both subscriptions?

The US Music Royalty Fee is based on music; the channels included in the Best of portion of your package do not include large amounts of music, so no US Music Royalty fee is due on that portion of your subscription.

UPDATE: Looks like someone leaked this doc to XMFan as well. Lot’s of interesting discussion there, if you’re interested in reading further.

Quite the altruist, that Karmazin.

But let’s be honest here. Given that the options, of which 24,000,000 were vested and 6,000,000 unvested, had an exercise price of $4.72 per share and that Sirius’s stock is trading at about 35 cents, they really weren’t worth anything. So a nice addition to the company’s incentive plan, but an ironic one in that Karmazin had little incentive to keep the Sirius (SIRI) options he’s forfeiting.

Sirius CEO Mel Karmazin obviously doesn’t share that view, though he may soon come round.

With just a week or so left until its first round of debt obligations come due, Sirius (SIRI) is in a tight spot. As Karmazin told investors last week, the company needs to raise $175 million, and quickly. If it can’t, it will end up either filing for bankruptcy or cutting a deal with Ergen. Given that Karmazin himself invested $2.7 million in Sirius stock last summer, Karmazin may well opt for the latter. Unless, of course, another potential investor–say AT&T (T) or Liberty Media (LINTA)–comes sniffing around. Either way, it’s going to be a volatile and stressful week for Sirius investors.

In other words, subscribers who’ve lost a favorite channel should continue to pay a monthly fee to Sirius so that it can continue to not provide them with that channel.

Not exactly the sort of reassurance you’re looking for if you happen to be, say, a fan of “Bubba the Love Sponge” who’s concerned that the company may allow the talk show host’s contract to expire, but that’s the only one Sirius seems to be offering for now.

This morning the DOJ approved the merger of satellite radio companies Sirius Satellite Radio (SIRI) (home to Stern) and XM Satellite Radio (XMSR) (home to Winfrey), a move that will create a satellite radio company with about 14 million subscribers.

In a statement, the DOJ said it found no reason to think that combining the only two satellite radio players in the market would create a pay-radio monopoly. “After a careful and thorough review of the proposed transaction, the division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers,” the DOJ explained.

“The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers,” said the DOJ.

An interesting rumor, and one we’ve heard before. Back in 2004 word on the street had it that Apple had cut a deal with Sirius to offer an iPod with a built-in satellite radio receiver. But it hadn’t. And according to Sirius CEO Mel Karmazin, it probably never would, because the feeling at Apple was that “they don’t need to put a satellite radio in their box.”

Has Apple reconsidered its position in the ensuing years? It’s certainly possible. Remember Jobs once said “people don’t want to watch video on their iPod” too.