Frustrated Karmazin: Regular radio 'sucks'
EmptyMel Karmazin, trying to shore up Wall Street support for Sirius XM Radio, told analysts Tuesday that regular radio "sucks" as an investment and that 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 as Sirius XM stock sank 10% on Tuesday to $1.14, 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 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 growth of negative 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 (has) stopped," he said.
That is not the case with Sirius XM, he said, noting that Clear Channel is the only radio firm in the country generating more revenue than Sirius XM. "And we know they're not growing," he said.
Karmazin also said that a la carte pricing is coming to Sirius XM on Oct. 6. (partialdiff)