CEO will depart on Feb. 1
Mel Karmazin has had his fill of heavy-handed bosses. After clashes with Sumner Redstone and John Malone the peripatetic exec is on the market again and would be a major get for any media company, unless he decides to take his millions and retire.
SiriusXM Satellite Radio, where Karmazin, 69, has reigned for eight years, said Tuesday he’s ankling his post as CEO and his board seat on Feb. 1. For much of this year he’s been locked in a power struggle with Malone, whose Liberty Media owns a big chunk of Sirius and is angling for full control. Karmazin’s contract is up at year end so the exit wasn’t a stunner but the timing was abrupt.
Karmazin, as head of Sirius, orchestrated the merger with XM Satellite Radio and expanded the nascent business with high-profile and costly content deals like a watershed pact with Howard Stern that pulled the shock jock off CBS Radio. He took Liberty on as an investor in 2009 in exchange for $530 million in cash, a move which may have been necessary but has come back to bite him with a vengeance.
Liberty, which started with a 40% stake and now owns about 49%, is Sirius’ single biggest shareholder and has petitioned the FCC to let it take “de facto” control. Karmazin fought the idea but it’s become inevitable that Sirius will pass into Liberty’s fold. Liberty execs have waffled between praising his management and calling him “not irreplaceable.” He’s expanded SiriusXM’s market share dramatically through deals with automakers. He tapped into the used car market and put through a successful price increase, the first in the history of the service, at the start of this year. Karmazin predicted his own departure at a conference last month when he said, “My instincts are that Liberty does not need me at the company.”
Sirius’ subscriber base grew exponentially during Karmazin’s tenure, standing now at 22.9 million.
“SiriusXM has a strong foundation to build on for the future and there is a great team in place to keep the company moving forward. I am confident that SiriusXM’s best years are ahead,” said Karmazin in a statement Tuesday.
Sirius’ shares were down more than 2% in late trading.
Sirius said its board has formed a committee to replace him, looking at both internal and external candidates.
Karmazin has deep roots in radio, starting his career at Metromedia and then running Infinity Broadcasting, which he sold in 1997 to Westinghouse, then the parent of CBS. He ran CBS Radio and the station group then became chief operating officer of CBS Corp., which was acquired by Viacom in 1999. He was named chairman Sumner Redstone’s number two. But Karmazin clashed repeatedly with Redstone. He left Viacom in 2004 and soon after relocated to Sirius as CEO.
(AJ Marechal and Andrew Barker contributed to this report.)