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Mel Karmazin chief executive Sirius XM expects to trim costs in everything!
By Amarendra Bhushan for CEOWORLD Magazine Updated:August 8, 2008
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Sirius Satellite Radio Inc. was well on its way to becoming a profitable standalone company, despite the moaning and whining about how they couldn’t survive without a merger. Sirius XM Radio on Thursday announced that its Sirius side posted a 25 percent jump in second-quarter revenue and pared back its net loss as it closed its final quarter as a standalone company, since the $3.3 billion deal closed last week.
Sirius XM CEO Mel Karmazin said that because automakers “control the dashboard,” new car radios that can play both Sirius and XM programming are years off. He also expects to trim costs in everything from programming to research and development as it integrates the newly merged companies Sirius and XM Satellite Radio. Radios will still get either XM broadcasts or Sirius broadcasts, depending on which service you pay for. But when the new Sirius XM (SIRI) channel lineup is determined, you will need a new radio to hear it.
- Sirius’ standalone net loss was $83.9 million, or 6 cents a share, compared with $134.1 million, or 9 cents a share, one year ago.
- Revenue rose 25 percent to $283 million.
- Sirius took over XM in a $3.3 billion deal.
- Ended the quarter it has 8.9 million subscribers.
- The merger — first announced in February 2007.
- combined company’s revenue would be around $2.4 billion.
- Now it is the second biggest radio group in the United States.
The companies did promise that the merger wouldn’t mean subscribers needed new radios. And somehow it was implied that dual-mode radios would be available soon after the merger closed. But as i see those new radios won’t be available until sometime next year. And here’s the kicker: if you were thinking of getting a new car with a radio that let you tune in Sirius show and XM’s channel, you’ve got a three-year wait.
“Karmazin may be a brilliant radio guy, but he’s no Wall Street Nostradamus,” Rick Munarriz wrote in covering the story.
This is a bit of a shocker, Will Sirius XM CEO Mel Karmazin ever learn?
What is benifit for end consumers?
Capital expenditures for Sirius alone doubled to $73.6 million through the first six months of 2008. What Karmazin is planning?
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