Sirius names new chairman
Los Angeles Times Publisher Eddy W. Hartenstein was named Thursday the non-executive chairman of Sirius XM Radio, replacing Gary Parsons.
Parsons was the founder and former chairman of XM Satellite Radio and held on to the chairman’s position after its merger with Sirius in 2008.
Sirius Chief Executive Mel Karmazin said that Hartenstein, as an independent director, “will bring an important new perspective to the chairmanship,” one that “our stockholders will benefit from.”
Hartenstein will remain publisher of The Times. He becomes chairman of a company that has struggled to gain subscribers during the recession and nearly filed for bankruptcy this year.
The company has recently gained subscribers, helped by the “cash for clunkers” auto sales-incentive program, which resulted in the sale of 700,000 new vehicles -- many of which came with trial subscriptions to satellite radio.
The radio company ended the third quarter with 18.5 million subscribers, up less than 1% from 18.4 million in the second quarter. But that was still 2% below the 18.9 million people who subscribed a year earlier.
Although the recession has taken its toll, Hartenstein said he liked the long-term prospects of a service “that offers several hundred radio channels, many commercial-free.”
“This has been a tough 18 months for the economy, but it will recover, and Sirius XM is well-positioned for growth,” Hartenstein said.
Others are less optimistic.
Satellite radio once offered a huge programming variety over commercial radio, said Fred Jacobs, president of Jacobs Media, a Southfield, Mich., consulting firm.
But he said the industry had run into an explosion of new media -- from iPods to streaming radio -- and now faces “a tough slog in an environment where the consumer expects everything for free.”
Last week, New York-based Sirius posted a quarterly loss of $149.2 million, or 4 cents per share. That compared with a loss of $4.9 billion, or $1.93 a share, in the same period last year. But that loss included a $4.75-billion impairment charge to account for a reduction in the company’s value.
Revenue rose to $618.7 million, from $613 million a year ago, assuming XM had been part of the business at the time.
Hartenstein has been a director of Sirius XM since July 2008 and was also a director of XM Satellite Radio Holdings Inc., a predecessor company. He was named publisher of The Times in 2008.
The former head of satellite television provider DirecTV, the Caltech-educated Hartenstein is no stranger to digital, subscription-based media.
In the early 1990s, Hartenstein persuaded his bosses at GM to finance the venture that would become DirecTV Group Inc.
In 1994, DirecTV revolutionized the satellite TV business when it introduced a small receiving dish that could be mounted on a rooftop or apartment balcony, eliminating the need for the wading-pool-sized backyard dishes that had been the standard until then.
By the time he left at the end of 2004, a year after GM sold its stake in DirecTV to Rupert Murdoch’s News Corp., the company was among the nation’s top pay television providers, with 13.9 million subscribers.
Hartenstein’s appointment was announced after the close of regular trading, in which Sirius shares rose 3 cents to 66 cents.