Mel Karmazin has announced plans to resign as CEO of SiriusXM early next year after ownership clashes with its major shareholder Liberty Media.
Karmazin said he will leave the satellite radio broadcaster and its board on 1 February 2013, as the group…
Mel Karmazin has announced plans to resign as CEO of SiriusXM early next year after ownership clashes with its major shareholder Liberty Media.
Karmazin said he will leave the satellite radio broadcaster and its board on 1 February 2013, as the group resists attempts by Liberty to increase its near 50% stake.
Liberty, which is headed by John Malone, is waiting for FCC approval to increase its ownership further, after the regulator denied a previous request in March to assume control of the company without majority stock ownership.
Karmazin did not disclose reasons for stepping down from SiriusXM but, at its annual shareholders meeting in May, he was cited saying he did not want to be responsible for reporting to anyone when making decisions.
SiriusXM has formed a search committee to find a successor, which is chaired by Liberty Media CEO Greg Maffei.
The development represents a landmark moment in the long-running saga involving Karmazin and Malone, two media mogul heavyweights.
Liberty was first considered as a White Knight for SiriusXM when it rescued it in 2009 from potentially defaulting on debt with a US$530m financing package. This package gave Liberty preferred stock that was convertible into an approximate 40% minority equity stake in the satellite radio firm.
After upping its stake to 48%, Liberty filed an application with the FCC in August to take ‘de jure’ control. At the time, Malone’s group said it intended to purchase enough shares to own more than 50% of SiriusXM, giving it control of, among other things, the company’s board.
However, the company said it would need FCC approval to increase its stake further.
As far as Liberty’s plans for the group are concerned, Maffei told analysts earlier this year that he believed it to be underleveraged, and suggested he would look to secure debt before possibly initiating a tax-free spin off of its holding.
SiriusXM is the result of a 2008 merger between Sirius and XM. Karmazin, who joined Sirius in November 2004, is credited for helping to orchestrate this deal, which enabled the enlarged company to gain a critical mass of customers.
