Monday, September 24, 2012

Maffei Says Sirius XM Radio Inc (NASDAQ:SIRI) Boss Karmazin Can Be Replaced

Chief Executive of Liberty Media, Greg Maffei has escalated a war of words with the boss of Sirius XM Radio, Mel Karmazin on Thursday. Greg said Karmazin stands a chance of being replaced when his contract expires at the end of the year.

Liberty Media is about to take control of the satellite radio provider, awaiting approval by the US Federal Communications Commission.

Maffei declared at a Goldman Sachs investor conference held in New York that Karmazin has led Sirius XM since the year 2004. His role may have been valuable but it was certainly not irreplaceable.

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Maffei thinks that there are plenty of people who have the potential of doing a great job at running the business. Maffei’s Liberty Media accounts for 49.6% stake in Sirius XM and has revealed that it has plans of raising its stake above 50%.

Karmazin’s contract ends at the end of the year. He told investors the previous week that he would welcome contract negotiations. He also felt that Liberty Media does not need him.

For his part, Maffei conceded that Karmazin must get a lot of credit for what he has done at Sirius and said that the board will still hold discussions with him over a new employment contract. Maffei also added that without Karmazin the business would not fail.

Karmazin has resisted the idea of working for a controlling shareholder since he had resigned from Viacom Inc amid friction with Sumner Redstone, the billionaire chairman of the company.

Under his supervision, Sirius XM has evolved to dominate the market for satellite radio in automotive vehicles. Karmazin has also helped in negotiating new contracts to maintain signature talent of Sirius XM on the air. The firm ended the last quarter with about 23 million subscribers.

Liberty Media had filed an application with the FCC to take over Sirius XM in August. 

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