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Karmazin hire adds $1 billion in market value

Friday, Nov. 19, 2004 | 11:11 a.m.

Mel Karmazin is the $1 billion man.

Sirius Satellite Radio Inc. shares jumped as much as 18 percent today after the company hired Karmazin, the former president of Viacom Inc., as chief executive officer. The increase swelled the 10-year-old company's market value to $7 billion from $6 billion.

Sirius, the second-largest pay-radio company, hired Karmazin a month after enticing talk show host Howard Stern to leave Viacom in 2006. Sirius is paying Karmazin $1.25 million a year in salary during the five-year contract, plus options for 30 million shares. Stern signed a five-year, $500 million contract with the New York-based company.

Sirius, which has never posted an annual profit, is trying to reverse its losses by spending millions to lure listeners by acquiring new programming. The company is competing for listeners with XM Satellite Radio Holdings Inc., which has more than twice as many subscribers as Sirius.

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