Infinity Chief Seen as Shrewd Manager
For a man who says he’s never given a news conference, who is known to shun public attention, Mel Alan Karmazin grabbed the spotlight with relish Thursday at a news conference announcing a $4.9-billion deal between Westinghouse Electric Corp. and Infinity Broadcasting Corp.
“As a large stockholder, I’d like to see you get the stock up, Michael,” the Infinity chief executive kidded Westinghouse chief Michael Jordan as the news conference began.
Widely considered the shrewdest manager in the radio business, Karmazin drew laughter with the line, but his background suggests he was dead serious.
A 30-year veteran of the radio business, Karmazin, 52, will now be the largest individual shareholder in Westinghouse and will run the combined Westinghouse/CBS radio group as its chief executive, reporting to Jordan. He will also get a seat on the Westinghouse/CBS board.
Karmazin has made lots of money for Infinity shareholders, including himself, by hard-nosed management of a difficult business. Karmazin owns 7 million shares of Infinity, which translates into about 10 million Westinghouse shares, according to one analyst, roughly 2% of the company.
“He is regarded as the best radio station operator in the business,” says Wall Street analyst Dennis McAlpine, of Josephthal Lyon & Ross. “He’s always done a great job for shareholders in good times or bad. He’s a little rough around the edges, but he delivers.”
Those who know him say Karmazin is a man with great chutzpah, somebody who speaks his mind and rarely minces words.
“He’s bright as hell, hysterically funny, enthusiastic and the best radio man in the business by a wide gap,” says another financial analyst who follows Infinity.
“You always know where you stand with Mel,” says Norm Pattiz, founder of Westwood One. “He’s a very straightforward guy.”
According to those who work for him, Karmazin can also be deeply loyal. Certainly shock radio jock Howard Stern would attest to that.
Karmazin is credited with giving Stern his big break. After the controversial personality was fired by WNBC-AM in 1985, he put him on the air at WXRK-FM (“K-Rock”)in New York, then syndicated him in 13 markets. Through the years, he has ardently defended Stern against charges of indecency levied by the Federal Communications Commission.
Karmazin grew up in New York and started working at the Zlowe Advertising Agency after high school while earning a business administration degree in night school. He left the agency after seven years to join the sales department of WCBS-AM and later went to work for John Kluge’s Metromedia, where he ran its two New York radio properties, WNEW-AM and WNEW-FM.
Karmazin went to Infinity in 1981 and under his management the company grew, typically buying under-performing stations in major markets and turning them around. Infinity became the nation’s biggest independent radio company and second-largest overall. The company boasts profit margins at some stations of 65%.
Infinity, which has a long track record of growing revenue, earned $54.5 million on revenue of $325.7 million in 1995.
In the 1980s, Karmazin took Infinity public, and in 1988, at the height of that decade’s buying spree, he and partners Gerald Carrus and Michael A. Wiener paid 11.8 times cash flow to take the company private, at $30.25 a share in, at the time, the largest leveraged buyout in radio history.
Karmazin took the company public again in 1992, when the firm was valued at $684.5 million, with the three principals controlling three quarters of the voting shares.
Two and a half years ago, by taking control of Unistar Radio Networks and the over-leveraged Westwood One, Infinity jumped to the No. 2 position among radio programmers, behind only Capital Cities/ABC Inc.
Karmazin is CEO of Los Angeles-based Westwood One, an arrangement that he said would continue after Infinity’s merger with Westinghouse.
“He’s very single-minded,” says Pattiz, who remains chairman of Westwood One. “Mel prays at the altar of cash flow and everybody knows it,” he said, adding:"He has a track record of not failing.”
Times wire services contributed to this report.