Former Viacom president Karmazin returns to radio roots with Sirius satellite

Friday, November 19th 2004, 8:24 am

By: News On 6

NEW YORK (AP) _ Sirius Satellite Radio Inc. is bringing in another big gun from the media world, tapping Mel Karmazin, the former president of media giant Viacom Inc., to be its CEO.

The announcement late Thursday came just a few weeks after Sirius sealed a $500 million deal with radio shock jock Howard Stern. Karmazin was Stern's old boss at Infinity Broadcasting.

In bringing in Karmazin, Sirius has snared a respected media executive with a grounding in radio. Karmazin went from being a station manager to running Infinity, which was eventually purchased by CBS, which was in turn bought by Viacom.

Karmazin left Viacom in June after repeatedly clashing with CEO Sumner Redstone. As Sirius CEO, he will replace Joseph Clayton, who will stay as chairman.

In an interview, Karmazin said he longed to return to a rapidly growing company. After talking with executives at Sirius, he found a perfect match.

``I was really blown away by the fact that they had done something with Howard,'' Karmazin said. ``I got really turned on by the people, the organization and what they have accomplished over the last three years.''

Sirius is in heated competition with XM Satellite Radio Holdings Inc., which has more than 2.5 million subscribers versus some 700,000 for Sirius. Two weeks after Sirius announced the Stern deal, XM reached an agreement that allows it to carry Major League Baseball games beginning next year. Sirius has signed up the NFL.

XM and Sirius have lost a combined $2.5 million over 12 years, but are spending heavily to capture enough subscribers to become profitable and dominate the emerging market. Both broadcasters offer more than 100 channels that can be heard anywhere in the country, and users pay subscription fees of $9.95 to $12.95 a month.

Stern promoted his switch Thursday at a fan rally in New York City where he handed out free radios and Sirius subscriptions. XM countered with a rally across the square by its ``Opie & Anthony'' shock duo.

Stern has hinted on his current show that his January 2006 start date at Sirius could be pushed up. Infinity has ordered Stern to cut back his on-air references to his move.