Interesting read...
Malone Knocks Sirius CEO
Liberty Chairman Faults Rival's Vision Amid Fight to Control Satellite-Radio Firm
By JOHN JANNARONE, July 12, 2012
SUN VALLEY, Idaho— John Malone's beef with Mel Karmazin isn't just about who controls Sirius XM Radio Inc. They also have differences over how the satellite-radio company should be run.
In an interview with The Wall Street Journal at the annual Allen & Co. conference in Sun Valley on Thursday, Mr. Malone, who is chairman of Liberty Media Corp., said he is more concerned about evolving technologies than Mr. Karmazin, who has been Sirius's chief executive since 2004, appeared to be.
"I'm a very long-term investor, despite my age," said Mr. Malone, who is 71.
"So I tend to be looking out 10 or 20 years, whereas I think Mel in all honesty right now has got a pretty short-term focus. I think they do an excellent job of running the company but we would be making more investments and...would at least look at globalizing."
In the last few months, Mr. Karmazin has battled publicly over whether Liberty, Sirius's biggest shareholder, should take control of the company. Liberty gave Sirius a lifeline in early 2009 with several hundred million dollars in loans and in exchange got preferred shares equivalent to a 40% stake in the company. Liberty has since increased the stake to more than 46% and asked the Federal Communications Commission for permission to exercise effective control. Sirius has opposed the FCC application, arguing Liberty hasn't taken concrete steps to get control.
In Thursday's interview, Mr. Malone displayed his frustration with Mr. Karmazin's attitude. "What gives Mel the right to say, hey, John, you've got to go away? ....This is a John-Mel thing. Control is control is control is control. And my whole life has been about control."
Mr. Malone said he wants Sirius to use its significant cash flow to return money to Liberty. "If we have to spend our money to go from 40% to 50% and decide we want to spin it off, we'd like to get that capital back before we spin it off," he said.
A Sirius spokesman didn't respond to a request for comment.
Until now, Liberty has said little about whether Mr. Karmazin's vision of the company is aligned with its own. Mr. Karmazin has guided the company to prosperity from the brink of collapse: Sirius is expected to generate about $700 million in cash this year after deep losses a few years ago. But there are questions about how it will cope with growing competition from Web-based streaming services like Pandora.
"From our side, we would probably put a little more money into technology [and] be a little more concerned about the future," Mr. Malone added, just having finished lunch by the resort's outdoor ice skating rink.
"As we contract audio programming long term, we would probably be pushing and talking a lot more about the next generation or two of service, including how do we enhance our Internet delivery of Sirius, as well as the next generation in the auto."
One competitive advantage Sirius has is that its users often want content other than music, and Mr. Malone said he wants to strengthen that hold with more exclusive deals. He mentioned examples such as the NFL or Major League Baseball along with CNBC or Bloomberg for news.
"You can't lock up music in a meaningful way but you can lock up this other stuff. And you can also innovate stuff and create stuff," he said.
