Monday, April 2, 2012

Hey Mel Karmazin, Why Is Everybody Picking On You

As Rodney Dangerfield liked to always say, "I get no respect", it seems that Mel Karmazin may feel the same way.  Known for his very public fight with Sumner Redstone when he headed up Viacom and now he is facing another fight, this with John Malone.  When you are owned by shareholders, there is always a risk of loss of control, unless you hold enough of the shares; in this case, it may be John Malone, who has that control.

A few years ago, Malone was the white knight, coming in to rescue Karmazin and Sirius from the clutches of another player, Charlie Ergan and Dish Network.  Again, someone was trying to push Karmazin out but at the last minute Malone arrived to save him.  Now as Malone turns from white knight to king, it is his turn to take something away from Karmazin.  Will Mel ever get a break?

John Malone has good reasons to want and pick up Sirius.  "If Liberty gets approval, which could be a lengthy process, the company would be able to use its existing stake to take control. Approval also would let Liberty more easily lift its holding in Sirius above 50%, a move that offers Liberty lucrative tax advantages."  How this plays out and what happens next to Karmazin remains to be seen.  But Karmazin likes to be in charge and if Malone takes control, it is likely that once again, Mel will be looking for the next business to manage.  One piece of advice; own it, or someone else will again try to disrespect you.  Thanks Rodney!

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