Mel to take a victory lap


Both Sirius and XM passed on holding quarterly calls with analysts as they released preliminary Q2 financial results. But now that the merger of the two former competitors has gone to closing, Sirius XM CEO Mel Karmazin will be celebrating the completion of the controversial deal by discussing combined results in a call next Thursday.

To recap, Sirius reported that total revenue for Q2 was $283 million, up 25% from a year ago. Operating expenses were basically flat, so the company’s loss from operations decreased to $24 million from $79 million a year earlier.

XM reported that Q2 revenues rose 15% to $318 million. The adjusted operating loss narrowed by $10 million to $37 million.

Karmazin has already told Wall Street that Sirius XM will be cash flow positive in 2009. But then, both companies, long before Mel was involved, assured investors they would each turn cash flow positive with four million subscribers – a milepost that both passed long ago.

RBR/TVBR observation: Can this turkey fly? If you look at the stock trading, Wall Street has its doubts, despite the merger to monopoly. But maybe Mel has a plan to turn subscription radio into a viable business. We quote his long-time right-hand man at Infinity Broadcasting, Farid Suleman, now CEO of Citadel Broadcasting, from our interview in 2006: “I can’t tell you whether satellite radio business will be profitable but if there is anybody that can make it profitable it would be Mel Karmazin,” Suleman said.