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The Good News for SIRI? Karmazin Likely Out

Stocks in this article: SIRI LMCA

Karmazin did do a remarkable job getting Sirius XM to where it is today. That much is not spoof or satire. But at this point Sirius XM needs a leader (or leaders, but preferably one leader) with vision. It needs a person who sees the future of media, particularly audio entertainment, as a multiplatform, largely social and mobile, endeavor. Stubborn in his terrestrial radio roots, Mel is clearly not the guy. Like Sheryl Sandberg, Karmazin would make a good, though not as good, COO to somebody such as Mark Zuckerberg.

Sirius XM loyalist longs should cease chants of long live SIRI. I will let the Sirius XM peanut gallery argue over the ins and outs of how Liberty will move forward, but I know the best possible outcome:

  • Karmazin exits stage left.
  • The SIRI ticker dies.
  • Sirius XM becomes part of Liberty Media's solid stable, which includes Starz, the Atlanta Braves and interests of various sizes in companies ranging from Barnes & Noble (BKS) to Viacom (VIA)
  • Liberty hires a tech/Internet/new media guy to lead Sirius XM or the cross-platform integration of the company's various interests.

In an age partnership among major and minor players in the media is becoming increasingly commonplace, the possibilities are endless. John Malone is likely not done building out Liberty. And he certainly has the ears of key people at companies such as Viacom to collaborate.

Now he needs to hire a visionary to put it all together and unleash the power of what he has in front of him. I think Malone gets this, but, for whatever reason, Liberty has not completely leveraged the synergistic possibilities.

As far as Sirius XM is concerned, move No. 1 of a new regime should be to take away the moniker "satellite radio" and, not so slowly, transition from satellite to IP delivery of content. Karmazin does not see the future and has no intention of working with those who do. He put in his time. He served his company well. Now, it's time for him to move on, for satellite radio to become nostalgic to some (just like AM radio) and for Liberty to make moves that really matter in the grand scheme of the future.

If this or a similar series of events plays out, I would seriously consider getting long LMCA.

At the time of publication, the author was VIAB in a custodial account for his minor child.

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