Sirius CEO: This Sucks

Published on November 11, 2008
by John Paczkowski

To hear tell from Sirius XM CEO Mel Karmazin, there was a lot to be happy about in the the troubled satellite radio provider’s third-quarter results–its $4.88 billion loss excluded, of course.

During a conference call to discuss the company’s horrifically bad financials, Karmazin described Sirius’s performance as “impressive,” considering the current economic climate. “It is very impressive that with severely declining auto sales, high unemployment and a generally weak economy, that our revenue grew 16 percent on a pro forma basis in the quarter,” Karmazin said, stressing the company’s 17 percent increase in revenues. “Many other good companies are not growing as a result of the issues in the U.S. economy. So we believe showing double-digit growth to be very impressive, especially if you compare SIRIUS XM’s results to other media and entertainment companies.”

Sure. Thing is, most other media and entertainment companies don’t have almost $1 billion in debt that comes due next year. Nor are they so reliant on the auto industry, a key driver of new satellite radio subscriptions. So perhaps Karmazin’s most apt, and honest, statement on Sirius’s (SIRI) current plight was this one, delivered a bit later in the call.

We think the environment sucks. It is not like we’re doing something wrong. It is that, unfortunately, we do not have a whole lot of control over what cars are getting sold. We do our best.”

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