Can Liberty and Karmazin Work in Harmony at Sirius XM?
Sirius XM Radio (NASDAQ:SIRI) chief executive Mel Karmazin does not expect to stay on at the satellite radio after its takeover by Liberty Media (NASDAQ:LMCA). Liberty said in an August 16 filing with the U.S. Federal Communications Commission that it planned to increase its stake in Sirius to more than 50 percent in order to take control of the company soon. Karmazin has been public in his opposition to the takeover.
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“My instincts … are that Liberty does not need me at the company,” Karmazin said at a recent event. “I have historically been expensive. It’s very clear to me that if I were Liberty, I would sit there and say, ‘I’m not sure we need Mel.’”
Karmazin’s current Sirius contract ends on December 31 and he said he has had no discussion with Liberty regarding his status. His compensation last year was about $10.7 million, according to Bloomberg data. Liberty Media chief executive Greg Maffei said in June that his company was keen on Karmazin staying on.
Liberty chairman John Malone has made clear his intention of spinning off Sirius as a publicly traded company after he gains controlling stake. Karmazin said he would consider staying on if Liberty did actually spin off the company to public shareholders.
Malone’s Liberty first received a stake in Sirius in 2009 in return for a $530 million loan that kept the radio operator from going bankrupt. As part of the deal, Liberty was not allowed to try taking control of the company for three years. That embargo ended earlier this year.
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