Last but not least among Sirius' attractions is the presence of Mel Karmazin. Karmazin
launched Stern's career when he ran Infinity Broadcasting, which owned WFAN, Stern's
home in New York. As Karmazin likes to brag, he has made $20 million per year for the
last 20 years. He doesn't need to work. But once Stern jumped to Sirius, Karmazin did,
Karmazin knows more about radio than anyone in the U.S. He is salivating at the
opportunity to sell commercials on the company's talk channels, while vowing that Sirius
will keep its music channels free of commercials. Many analysts are ignoring this source
of revenue, but that is a mistake. One of the knocks on Sirius in the past was its
profligate spending ways. It should also be noted that nobody runs a tighter ship with
regard to expenses than Karmazin does, so those days are over!
My firm has owned Sirius since Karmazin arrived. We haven't made money yet on our
first lot of shares, and we bought more in March at $4.51. We are very patient long-term
investors. I don't know how soon the Street will figure out the value here, but eventually it
will. This isn't a trade, something I don't know how to do.