: Mel Karmazin is the new CEO of Sirius, landing there with main man Howard.
: Fred Wilson’s take here. Mine later.
The only thing that surprises me about this move is Karmazin didn’t take some of his get-out-of-Viacom money, round up some other supporters, and buy a controlling interest in Sirius on his own.
In the short term, this helps Sirius’ view on Wall St. The street loves Mel and will give Sirius the benifit of the doubt they may have not received beforehand. As of 7pm, the stock has gone up almost 20% due to the news.
This also helps Stern. As has been said elsewhere, Karmazin knows how to get the most out of Stern and Stern feels comfortable with Mel. As if he wasn’t getting whatever he wanted out of Sirius before (1/2 a billion $ over five years?), he certainly will now.
Karmazin does have his work cut out for him. The reason Sirius is in second place in the satellite radio industry has nothing to do with content. It has to do with technology and relationships with auto companies. XM hit the market first, and seems to come out with the next generation of products first, the portable receiver the most recent example**. Karmazin also has to figure out how to make money while having to pay down sigificant debt from initial operating costs, pay the NFL and pay Stern (XM only has operating costs and MLB).
The real loser here is terrestrial radio. Karmazin is as big of a star in his world of media business as Stern is in media. Between the drain of talent from the industry, FCC holding terrestrial radio’s feet to the fire and a lack of creativity that has stagnated the industry for at least the last decade, things don’t look good there.
**Disclamer: I work for XM
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