Sirius XM chief: regular radio "sucks"
By Paul Bond
LOS ANGELES (Hollywood Reporter) - Mel Karmazin, trying to shore up Wall Street support for Sirius XM Radio, told analysts that regular radio "sucks" as an investment while the company he heads deserves more respect because of its growth prospects.
The CEO's message, delivered at a Merrill Lynch conference, seemed to fall on deaf ears Tuesday, though, and Sirius XM stock sank to a price not seen in more than five years.
Sirius XM shares fell 10% on Tuesday to $1.14 on the Nasdaq, their lowest point since May 21, 2003, when shares traded at $1.07.
Karmazin said the company will end 2008 with 19.5 million subscribers and will end 2009 with 21.5 million, guidance that fell short of some analysts predictions.
Karmazin, who called his guidance "very, very conservative," stressed that Sirius XM will show about 13% revenue growth next year compared with shrinkage of 3% for the traditional radio industry.
"The reason that radio sucks today, and the reason that most of you don't want to invest in it, is principally because the growth stopped," he said.
That, of course, is not the case with Sirius XM, he said, noting that Clear Channel Communications is the only radio company in the country generating more revenue than Sirius XM.
"And we know they're not growing," he said. Continued...