Karmazin: Sirius XM Could Team Up With WorldSpace
Over the last year, Liberty Media (NSDQ: LINTA) has come to the rescue of two satellite radio companies: the U.S. dominant Sirius XM (NSDQ: SIRI) and WorldSpace, which is biggest in Asia and Africa. So, it only makes sense that Sirius XM and WorldSpace may work together in some way, Sirius XM CEO Mel Karmazin (pictured) told attendees at the Reuters (NYSE: TRI) Global Media Summit in New York. He didn’t provide any specific details—but the Reuters report on his remarks suggests that Sirius XM could take some of its offerings outside the U.S. and Canada for the first time via WorldSpace or provide some sort of strategic support to the struggling company.
WorldSpace raised almost $150 million in an IPO in July 2005, but filed for bankruptcy protection just over a year ago. Reuters says that Liberty Media, which controls about 40 percent of Sirius XM, has been buying up WorldSpace debt.
As for Sirius XM, which has improved its financial performance significantly in recent months, Karmazin says holiday sales so far are “very much on target to what we anticipated,” crediting in part a recent ad push. The company has been particularly bullish on its prospects lately, saying it expects to see growth in subscribers and revenue next year “regardless of the magnitude of any recovery.”
Next year, however, the company will face a different challenge when Howard Stern’s five year, $500 million contract comes up for renewal. Karmazin didn’t make it seem likely that the company would too easily re-up Stern at that price, saying, “It will start with Howard feeling that he is working too hard and doing too many shows and not making enough money. Our side would say, ‘We want you to do more, and get less money.’”
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