Siri Stock Thread March 2011

judge: this court is now in session. Mr. Donnelly I don’t see muscle13

courtroom doors fly open . . in bounds muscle13 . . powerwalking toward the bench

muscle: good evening your honor, muscle13 on behalf of sirius xm; I’m sorry I’m out of breath your honor, I just got back from the gym.
judge: are you ready to close muscle?
Muscle: yes your honor
Judge: proceed

A bit out of breath, muscle hurriedly walks back to general counsel table to retrieve his notes, a 4” thick black, loose-leaf, binder summarizing 17 years of internet radio history. Muscle picks up the binder, turns and paces off 3 steps toward the jury. He then stops, turns back toward general counsel, sets the binder down on the table, straightens his tie . . . and then calmly, without notes, approaches the jurors. Hushed courtroom . . . muscle starting out in a deliberately low tone . . he begins his closing argument

Muscle: A couple of things. The history is clear. Tyler has been pushing for Sirius XM to go heavy after the internet. I asked him to show me the business model that works. He couldn’t do it. For 17 years . . . 17 years, people have been searching for a successful business model for internet radio. If one exists, I haven’t seen it and neither has anyone else . . you heard the testimony about Mark Cuban . . you heard the testimony about Broadcast.com . . you heard the testimony about Yahoo and about AOL.

You heard testimony from my 6 year old nephew who runs his own internet radio company . . 6 years old . . . 6 years old . . . and he has 37 followers. It’s easy enough to do. Anybody can do it. And that’s the problem . . there are no barriers to entry . . over 1 million internet radio companies and no barriers to entry.

You also heard testimony about how the audience has become fragmented and how the proliferation of smartphones today is no different than the proliferation of PC’s in the 90’s. I asked Tyler to name me one person he knows who doesn’t have a PC. He couldn’t do it. I asked Tyler to name me one person he knows who doesn’t have internet access. He couldn’t do it. Of course not.

I asked Tyler to name ONE profitable company in the history of internet radio . . just one . . he couldn’t do it. That’s because there isn’t one.

I repeatedly asked Tyler how Pandora was going to make money. He wouldn’t answer my question. But that’s ok . . . we have Exhibit A-1 . . . Tyler’s own words in print. Recall what he said, “Toyota and Pandora Pairing Gives Insight on How Pandora Will Make Money – Will Sirius XM Emulate This Strategy?”

I direct your attention to the chart: http://siriusbuzz.com/toyata-and-pan...s-strategy.php

So THIS is how Pandora is going to make money? This is h . . .

Interrupted by Savery outburst . . . Savery screaming from counsel table

Savery: DON’T PUT F*CKING WORDS IN MY MOUTH!
Judge: bailiff remove Savery from the courtroom at once; jury will disregard Mr. Savery’s remarks
Savery: YOU’RE NOT G*DAMN SMART ENOUGH TO DO IT!
Judge: order . . . order in the court

Savery still screaming as being dragged from courtroom

Savery: MEL KARMAZIN SAID SIRIUS XM SHAREHOLDERS ARE A BUNCH OF ROOKIES. YOU KNOW WHAT? HE WAS RIGHT . . HE WAS . . . courtroom doors slam shut.

Judge: I’m sorry ladies and gentlemen. Muscle, please continue.
Muscle: thank you your honor

You’ll recall that I asked Tyler to tell me the EBITDA margin on internet radio. You heard his answer clear as day . . . he said he doesn’t care . . . . he said he doesn’t care (expletive deleted). Well investors in Sirius XM better care, you damn well better care because if Tyler has his way the EBITDA margin will suffer and the share price will drop.

Look, Tyler is a smart guy . . . but he just doesn’t understand the radio business. It’s not his fault . . . he just hasn’t followed it long enough. You heard me ask him to name one other radio company he has followed besides Sirius XM and you heard his answer.

You heard the testimony of Mel Karmazin. Mel Karmazin said “Internet Radio is NOT a business.” You heard the testimony of Bob Pittman. Bob Pitman said “Internet Radio is a feature” . . . a FEATURE!

Tyler Savery wants to keep reaching for the stars and the false riches of Internet Radio. I urge you to listen to the people who are actually in the radio business. Pay attention to Mel Karmazin; pay attention to Bob Pittman; pay attention to Jeff Smulyan. Internet Radio is NOT a business. I thank you for your attention.

Judge: thank you muscle. Ladies and gentlemen of the Sirius Buzz forums, the case is now in your hands. You may begin deliberations.

Another thing I found interesting was notion that we should all pay very close attention to what the CEO's of these companies say. Which, as far as I am concerned, is a terrible idea. If I listened to the CEO's of Blockerbuster, Enron, and AIG, I would be penniless. I put as much credit into what CEO's say as I do about what Jim Cramer says.

Wow what's going on here? Guys I was just arguing about the business. I disagree with Spencer. My intention was not to make fun of anyone. Roadkill I appreciate your support but please stop.

You guys know I invested in a lot of media and radio stocks over they years and Sirius is my favorite. Thus far my investment in Sirius has done even better than I did with Infinity in the 90s. My other fav for years. Sirius was tough for awhile, but once I saw EBITDA coming, well I guess I was good at buying low. But I pay attention to guys like Mel and Pittman not because they are just CEOs or COO's or presidents of companies. I pay attention because Mel has run the best performing radio companies in terms of EBITDA in history. He is in the Radio Hall of Fame and has been performing for more than 30 years. Pittman was one of the founders of MTV, one of the best performing if not the best media business in history, has been in radio and new media for decades. These are the top people in the industry. Thats why I pay attention.

Wall Street pays attention to EV/EBITDA. That's it. The business model is what I am after. Everybody has got to pay attention to it because if Sirius chases after a poor business model really hard, Sirius becomes like every other internet radio company counting ears and eyeballs instead of EBITDA.

I don't dislike Spencer or Newman or Demian. This is just about the radio model. I very much disagree with them and I very honestly believe they don't understand the business like the industry understands it. Not even anywhere close. That's it. Thanks.

Quote:

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Originally Posted by MUSCLE13

I very much disagree with them and I very honestly believe they don't understand the business like the industry understands it. Not even anywhere close. That's it. Thanks.

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I appreciate your opinion. My question is, why do you bother to read what they write or listen to what they say?

There are plenty of people in this world who I dont follow because I don't believe they truly understand what it is they speak of. I don't understand how anyone would benefit from constantly reading what they feel is misinformation.

"From satellite radio to the introduction of Pandora and other internet services, there are a growing number of entertainment options in the car. But Sirius XM Radio CEO Mel Karmazin thinks he’ll be facing competition from terrestrial radio for years to come."

http://www.insideradio.com/

"AT&T wants to get bigger (and stronger) than Verizon, and if this deal makes it past the federal regulators, three out of four American wireless users would be with either AT&T or Verizon. AT&T alone would have 130 million customers, twice as many as Sprint. As more radio is delivered to mobile devices, more capacity is a good thing, and thus AT&T’s deal should help radio that’s streaming and otherwise available to smart phones and their cousins. And short-term for radio? If AT&T can gobble up T-Mobile, it’s going to focus even more on Verizon Wireless. That should be good for ad budgets."

http://www.radio-info.com/news/radio...l-for-t-mobile

"Radio could benefit from AT&T’s $39 billion deal for T-Mobile"

What about the lack of competition? This type of deal is happening in many industries; media is now controlled by only six companies.

The consumer gets screwed yet again.

Quote:

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Originally Posted by MUSCLE13

Roadkill I appreciate your support but please stop.

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You stay out of this muscle!

And don't be so full of yourself . . . this issue is much bigger than you or Tyler.

You are merely a convenient vehicle to frame the debate, a conduit for discussion. All those leg-presses must have drained the blood from your brain.

Now go take a sitz bath!

"The deal to acquire the wireless carrier from German parent Deutsche Telekom has no shortage of intriguing storylines. For one thing, the regulatory scrutiny will be intense, which likely had a lot to do with the transaction’s $3 billion breakup fee.

AT&T may draw on another high-profile deal that faced sizable regulatory challenges, the tie-up of satellite radio providers Sirius and XM. In that case, the pair argued that although they were the two biggest players in their industry, competition was ample from terrestrial radio, iPods, etc., an argument that passed muster with regulators.

For AT&T, the argument will be slightly different, but similar. While the acquisition of T-Mobile will unquestionably give AT&T a big lead in subscribers nationwide, Rostan expects the company will argue that cell phone choices are made on a local level, where there is ample competition in many parts of the country. AT&T, Verizon, Sprint Nextel and T-Mobile are the biggest national players, but as Forbes colleague Elizabeth Woyke wrote Sunday, “In some large cities, including Detroit, Miami, Sacramento and San Francisco, Texas-based MetroPCS boasts more subscribers than T-Mobile and should be considered a major carrier.”

http://blogs.forbes.com/steveschaefe...-t-mobile-buy/

Quote:

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Originally Posted by Sirius Roadkill

You stay out of this muscle!

And don't be so full of yourself . . . this issue is much bigger than you or Tyler.

You are merely a convenient vehicle to frame the debate, a conduit for discussion. All those leg-presses must have drained the blood from your brain.

Now go take a sitz bath!

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SRK - please continue the deliberations.

The vision in my head of Spencer being dragged out of court kicking and screaming, door slammed as he tries to get the last curse words out is just fantastic entertainment value for posters who heard that exchange.