Mel Karmazin of Sirius Satellite Radio Inc. (NASDAQ: SIRI) came on CNBC this morning defending the combined Sirius-XM in an exclusive with David Faber.  This has shares somewhat higher by almost 4%, but Faber’s tone throughout the interview was very cautious and Mel Karmazin himself didn’t quite seem as enthusiastic as the Mel Karmazin of the past.

Karmazin was on for an entire segment, so these are just someparaphrases for conjecture this morning.  Karmazin did come clean aboutthe length of time that it took to clear this merger has had an impacton the timing of its model, but he also noted that he’s glad to have itclosed rather than not closing the merger.  One such issue he mentionedwas the consumer confusion over having two key brands on the market.

Karmazin noted that the company is now essentially fully funded,although he noted that raising the $1.25 Billion Sirius-XM raised cameat a higher price because of the tough environment right now.  For somepersonal conjecture, it might be advised to not consider this "fullyfunded" comment to mean there is a zero chance that more stock, debt,or other financing sales are coming.  Whether or not that is the case,we’ll know that later down the road.

As far as profitability and "free cash flow positive," Faber sort ofsaid "we’ve been hearing this forever" about next year being free cashflow positive which Karmazin was sticking with.

Karmazin also expects growth this year despite horrible auto sales andhe has said that churn rates haven’t increased much.  He also talkedagain about the $400 million in "synergies" and savings of thecompanies.

Karmazin also noted that the company has more subscribers than almostall US media subscriber services.  In radio they are now only second toClear Channel in revenues for radio revenues and he said Sirius-XM isstill growing rapidly while Clear Channel has no growth.

David Faber asked Karmazin if he is considering a reverse stock split.Karmazin noted that the company "can consider anything" but anyone thatwants to buy the stock should buy it based on the value.

While there were many other comments including the current trends inautos and the lack of churn, the overall oomph has been a veryanti-climactic closing of the merger so far when you consider theextreme time it took to close the deal and considering all of thecontroversy surrounding the deal.

Sirius shares right before the open are up 3.8% at $1.64 on almost 4million shares.  That follows two miserable days of selling.

Now for the long integration plan……

Jon C. Ogg
July 30, 2008

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