Sun Valley: John Malone Speaks Out on His Plans for Sirius XM and Its CEO
The mogul says Mel Karmazin must make peace with Viacom and CBS chairman Sumner Redstone and explains why Live Nation isn't his favorite investment.
Allen & Co.'s annual gathering of media and tech moguls in Sun Valley, Idaho, tends not to produce too much straight news, but Liberty Media chairman John Malone on Thursday had some frank words on his battle for control of satellite radio firm Sirius XM Radio.
According to The New York Times, Malone was questioned by reporters in the mountain resort about the future of Sirius CEO Mel Karmazin. “I would prefer not to lose Mel," he said, "but he’s gone public and said he won’t work for me, so what am I supposed to do?”
Malone also commented on Karmazin's recent remarks that he doesn't get paid enough. “He tells the public he’s underpaid? It’s a joke,” he said, according to The Times. “He’s clearly doing it tongue-and-cheek. He has an enormous equity incentive" in the form of more than $120 million in stock options.
Malone also argued that Karmazin might have a problem with moguls due to his past experience as CEO of Viacom, when he departed after clashes with controlling shareholder Sumner Redstone. “He needs to go make peace with Sumner Redstone,” Malone said. “He needs to go back in history, transport himself back in time, mend his fences with Sumner and go be a new person.”
A spokesman for Sirius and Karmazin declined to comment on Malone’s remarks.
Liberty has slowly increased its stake in Sirius to nearly 47 percent while continuing to lobby the FCC to state that it de facto controls Sirius.
Malone, known as a dealmaker who likes to avoid taxes in his deals, also signaled that Liberty would want to take full control and later spin off Sirius into a separate company again.
“I don’t believe in conglomerates,” The Times quoted him as saying. “There’s no question that eventually Sirius will be an independent company. The question is in what time frame and under what circumstances.”
While he would like to keep Karmazin as CEO if Liberty formally gains full control of Sirius, Malone said, “There are many quality managers in the world.”
But he ruled out Liberty CEO Greg Maffei, saying, "Greg’s not an operating manager."
Malone also answered questions about other companies in which Liberty owns stakes. Asked about live events firm Live Nation, he explained why the company isn't his favorite investment.
“You’re talking about rock musicians; this is not my kind of thing,” The Times quoted him as saying. “I don’t like a business where the assets go up and down on elevators. I like them to be fixed, hung on poles or up in space going around."