Karmazin: The company is far ahead of where most people thought it would be. When I joined in November 2004 we had 700,000 subscribers, and as of the end of the first quarter of this year we had over 4.2 million. Obviously, investors are most interested in how we can make money. In 2007, for the first time, we will be generating cash as compared to using cash. That could happen as soon as the fourth quarter this year.
Wall Street has gotten past this idea that people will pay for radio. The catalyst for the stock moving now is, what’s the business model? So I think it’s so important that we generate this free cash flow and that we do generate a billion dollars by 2010. That would clearly say that this is a good business.
That’s the reason I joined. At CBS, everyone would worry about how well “Mission: Impossible” would do, and I would try to get them to focus on cash flow of outdoor advertising or our TV or radio stations. I feel most comfortable running a business where the report card is financial.
I was asked the question. I answered it honestly. Certainly I’d be interested if a company is for sale, if the price is right and if regulators would allow it. In the case of satellite radio, it’s hard to argue that strategically [buying XM] would fit. It’s not something we’re pursuing.
An organization like the NAB should be a proponent of free speech. There’s certainly disappointment on my part and I know others who are saying, gee, that’s not what the NAB should be doing.
I do. I think it makes sense assuming they are buying at the right price. It still will be immaterial to revenues for an awful long time. If something happens to the more mature assets at News Corp., I don’t think that MySpace is going to be an offset.
The opportunity is with the larger companies. Yahoo or Google have the potential to balance out some of the erosion, but the problem is those Internet firms are not for sale. The stock multiple of those Internet companies, versus the stock multiple of media stocks, makes that kind of combination almost impossible.
It’s not something I wanted to see happen, since I was the one who put the companies together. It’s only been about six months since the split. Do the math and the stock is down significantly from that time.
