XM's CEO To Step Down

XM founder Hugh Panero will be leaving the Washington satellite radio company in August.

XM's Hugh Panero. (Katherine Frey - The Washington Post)

The news comes as XM is seeking to win regulatory and shareholder approval of its merger with Sirius satellite radio out of New York.

Sirius chief executive Mel Karmazin is set to run the combined company should it pass regulatory muster. XM chairman Gary Parsons would take over as chairman of the new company.

XM said president and chief operating officer Nate Davis would assume the duties of president and interim CEO.

The company's release included no comments from Panero.

Here's how staff writer Frank Ahrens described the founder in a February story:

Panero and head XM music programmer Lee Abrams have been with XM since nearly day one, when the company was housed in a basement apartment near Dupont Circle and the only sign of a radio company in the making was a whiteboard with dozens of format ideas scribbled on it.

Panero is a "Star Trek" fan. XM's broadcast operations center at the company's headquarters in Northeast D.C. is a dazzling spectacle of display monitors and lighted control boards sometimes referred to by employees as the bridge of the starship Enterprise.

In the middle of the room is a swiveling chair Panero had modeled after Capt. James T. Kirk's command seat on the Enterprise. Panero sat in the chair and pushed the button that launched XM's service in September 2001.

Panero is a music junkie who religiously listens to XM's channels and is credited with the vision that cultivated the business through its early years, negotiating the deals that got XM installed in new cars and acquiring talent.

However, XM's board soured on Panero's performance last year after the company missed its earnings guidance for several consecutive quarters. The company got bogged down in legal battles with the music industry and terrestrial broadcasters over technology issues and has allowed the cases to drag on, rather than settle with the groups, as Sirius has. And when Sirius started paying hundreds of millions of dollars for content -- such as the NFL and Howard Stern -- the XM board thought Panero failed to respond effectively and could no longer clearly define XM's vision, said a source familiar with the situation who spoke on condition of anonymity because of the sensitive nature of the issue.

Panero said if he could have changed anything about his time as chief executive, he would have put off having to pay so much to acquire programming early in XM's life, before it began to stabilize its losses.

Panero said he was proud of the business he helped build and will remain XM's chief executive until the merger is approved and perhaps beyond, if it is not.

He said he would be a little sad to give up the helm of a merged company, "but there can only be one CEO and one chairman."

By Dan Beyers  |  July 24, 2007; 4:37 PM ET  | Category:  XM Satellite Radio
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Another problem XM Radio - and Sirius too -is its automated, dull, robotic programming. It is not real radio -except for the very occasional live intervals, e.g. Bob Dylan's show, and it never programs real, live, "realtime" radio.

As such it is nothing more than a kind of musical wallpaper meant for people who listen to radio as a kind of background noise in their lives. That's why I discontinued my subscription after six months; XM is a rip-off. I now have some expensive XM-only receivers to sell and needless to say there are hundreds of satellite receivers, XM and Sirius up for sale in eBay alone.

Instead of improving their product line, XM and Sirius have taken the standard course which all monopolists (or duopolists) who milk the public with overpriced products, have down the last century: they keep up their mediocre operations, but attempt to eliminate competition by merging into a monopoly. The only solution here is a firm breakup of their operations: force XM and Sirius dissolve themselves into four or five or more separate satellite entities, much as was done with the Standard Oil monopoly in the early 19th century.

"Monopoly mediocrity" and "wallpaper music programming" are the reasons that for example, XMs classical music programming is particularly dismal. Classical music requires a listener's full attention - with perhaps such exceptions as much of (not all) baroque music, some of which was originally composed as a background for the partying of aristocrats and royalty.

What is needed here is firm and forceful governmental intervention of a kind we are not likely to get unless someone with at least a small degree of integrity, and a firm intent to serve all Americans, takes over the running of our federal executive (which is to say, we need something that hasn't happened in 80 years).

The proposed XM-Sirius monopoly must be stopped in its tracks, and both these satellite operators must be told that they (or the successor satellite radio companies created afer the break-up of their current duopoly) must start to include local programming by non-satellite broadcasters, including local public radio stations, if they are to be allowed to continue to operate in the United States. If they attempt to enlist their subscribers to their cause, both XM and Sirius will likely find only a very few people who are going to be willing to waste their time and effort petitioning legislators and regulators on behalf of two cynically run purveyors of jumped-up "elevator music" who have misled those consumers into thinking that XM and Sirius are authentic "radio broadcasters."

Posted by: L.Massano | July 24, 2007 7:03 PM

Let them merge, require they sell enough assets to create
a competitor or two.

Have them sell the new York or DC ground station and
the birds from one to a bona fide third party.
preferably with experience in radio.
If XM can't make a go, or sirius can't make a go,
I bet Virgin radio or sinclair, or someone else
would be willing to try.

Posted by: pat | July 24, 2007 7:12 PM

Automated and dull programming? If I wanted to hear a live DJ announce every song or talk about his recent breakup I would listen to FM radio for free. I pay for satelite radio to be able to listen to uninterrupted music. Just keep the playlists fresh and updated daily and I will be happy. No need for people chatter.

Posted by: Jason S | July 24, 2007 7:17 PM

all i have to say is that I LOVE MY SIRIUS RADIO.. i listen everyday. I'm a Stern fan, and i really enjoy the CNN channel. I also digg a few of the music channels too. I figure if the merger means i pay less for a package that suits my needs than I say, YES on the merger.

Posted by: subscriber | July 24, 2007 7:37 PM

It easily costs more than $150 million to have a satellite positioned in space to be able to do what XM and Sirius do. They did that and accepted the risk of failure in getting there. They have the infrastructure to operate the systems. Forcing sale to a 3rd party would likely kill the system--if you could find a buyer who could afford the entry costs.

I prefer satellite radio's absence of mindless chatter by FM DJ's and think the current monthly rates are quite reasonable.
If I could pay a few dollars a month more to be able to receive my favorite channels from both services, I would not have to own 2 different receivers, and my overall cost would be less.

Posted by: Steve | July 24, 2007 7:50 PM

I absolutely love my XM radio, and the great variety of music, talk and sports available. I love even more the idea that XM/Serius is considering doing ala carte service, where I can subscribe only to what I listen to. I love this satellite country!

Posted by: Michael Becker | July 24, 2007 7:59 PM

I absolutely love my XM radio, and the great variety of music, talk and sports available. I love even more the idea that XM/Serius is considering doing ala carte service, where I can subscribe only to what I listen to. I love this satellite country!

Posted by: Michael Becker | July 24, 2007 7:59 PM

I absolutely love my XM radio, and the great variety of music, talk and sports available. I love even more the idea that XM/Serius is considering doing ala carte service, where I can subscribe only to what I listen to. I love this satellite country!

Posted by: Michael Becker | July 24, 2007 7:59 PM

I have had my XM service since late 2002. I bought it mainly for content I can't get from standard radio stations. The only channels I listen to regularly are the Chrome (classic disco) and The ESPN radio channel.

Why ESPN radio? Because I can't get it on standard radio 24 hours a day! They are great. I know some purist out there aren't happy with the automated nature of the music channels.

You have to remember if all the XM channels were staffed with live hosts 24/7 your subscription would probably be triple what it is now.

The author of this article suggested putting "home town" radio stations on XM much like cable is forced to carry local stations.

I say no! Where would you put them? You would literally have to make room for local stations for the Top 100 markets for starters and than you have the problem of masking local spots plus liscensing fees.

I'm sorry but I rather like my XM the way it is now. However I wish they would play more '70's based music on the urban oldies channel.

Thank you for letting me speak my peace!

Oh, one more thing, couldn't you nice folks carry the complete broadcast of the "History of Rock and ROll Special" (the one produced by " Boss Radio Pioneer, Bill Drake") and carry it with segments on each of the '50's, 60's and '70's channels.


Come on now, YOU COULD DO IT!!!!

Posted by: Alvin G. Lawton | July 24, 2007 8:20 PM

Reading some of the posts above - which are almost certainly by younger-than-30-year-old people - I realize how fortunate I've been to have listened to radio in the New York City area for years. Radio, AM and FM, had announcers and DJs who added to their programs in many ways - not least by doing live interviews with performers and even by showcasing new talent.

I'm not saying all this never happens on XM or Sirius. What I do say is that it happens so rarely as to be a negligible factor in assessing the quality of these satellite broadcasters.

Americans will not tolerate monopolistic business practices for long. Sooner or later they - or other people, influential in auxiliary businesses -get disgusted with monopolists.

Example is the way in which a major manufacturer of personal computers, Acer, has just spoken out against the many flaws in Microsoft's latest bungled monopolist's product-offering, Vista. More will speak out. Innovators will arrive and Microsoft will eventually collapse as a major player in computer software.

Competition in a corporate business culture is the only solution where real quality is lacking in products which any sensible person should expect to be both original in its content and reasonably priced. Monopoly has always produced a diametrically opposite result. The only exception was the old AT&T, which while a monopoly, was not a bloated and aggressive one, and was always careful not to compete (for just one example) with smaller rural, telephone companies.

XM and Sirius's products are neither original nor are they reasonably priced - and their fees will go up when they merge - and XM-Sirius will then pile on the commercials. All their loyal subscribers can expect if this monopoly is allowed in a further deterioration in quality, with eventual incessant commercials and higher fees.

Exactly the same, in other words, as what happened to the entire cable television industry in the last 30 years - and cable is the business model of which XM and Sirius are almost exact organizational and product-presentation clones.

Posted by: L.Massano | July 24, 2007 8:29 PM

I'm over forty, I grew up on great FM radio; those days are gone! The DJ's only care about trashing everything...they can't even figure out that Howard is not doing what they do. Anyway, XM is fabulous and WHFS2 helps me keep my alternative music bug at bay...if you can get rid of Clear Channel et al, FM might be good again, but until then give me XM anyday

Posted by: ccohen | July 24, 2007 8:42 PM

I really hope the XM - Sirius merger works well, for my wife & I love it. We have different musical tastes and listen to what we like. I haven't bought a CD since getting XM radio 2 years ago.

Posted by: Cliff Claven | July 24, 2007 8:44 PM

L. Massano is clearly a lobbyist for the National Association of Broadcasters, or should be. What a crank.

If XM and Sirius merge they only will have a monopoly on satellite radio. If they charge too much, folks will have other options to listen to music in their car:

1) Crappy commercial radio that L. Massano so loves (and probably gets a payceck from)

2) Listening to music via an MP3 player or iPod

Given that I hate number one, and am too lazy to cart my iPod everywhere, I LOVE the fact that I can pay XM to put LOTS of music choices at my fingertips.

L. Massano, go crawl back into the Marconi cave that you came from you loser.

Posted by: Love my XM | July 24, 2007 8:46 PM

As a member of the XM engineering team I enjoyed working with Hugh Penaro and members of the technical staff as we assembled the system and put it on the air.

The satellite radio concept is great - good music as you like it anywhere in the USA. I once drove from Washington D.C. to Boston listening to various channels without commercials or loss of signal.

I an not in favor of combining XM and Sirius. The two are not technically compatible so a combined receiver will have to contain both chip sets and cost more than either one alone.

Combining them will also reduce consumer choice from two to one and eliminate competition.

Posted by: Fred Hills | July 24, 2007 8:55 PM

I was going to add another comment,but...

I'd also forgotten that at least one generation of people had grown up having it drummed into them that Howard Stern (who is "not doing what they [the FM DJ's] do") is a...a genius. That's right, a genius!

I listened to Howard Stern for about two weeks when he first went on the air in the early 80s in New York City and had a few laughs and then saw through him - as thousands did - as an insecure blowhard with nothing to say to anyone who thinks.

What do you call the opposite of "The Enlightenment"?

"The Great Dumbing Down," perhaps?

It's true that XM-Sirius does have "The Great Dumbing Down" of the last 20-plus years in its favor - just check out some of the comments on this board.

But I believe that the people's smarts - and their love of the real thing in entertainment, as compared with what is fake - will win out in the end.

Do the chickens ever revolt against Colonel Sanders? Yes, they do: American history proves it.

I've been around long enough to notice how an awful lot of people who I thought had been permanently dumbed-down - and duped and manipulated - managed to smarten up when they realized - sometimes before it was too late - how badly their own self-interest was being damaged by snake-oil salespeople in and out of business or government, who claimed to have Americans' self-interest at heart.

Posted by: L.Massano | July 24, 2007 9:19 PM

So, L.Massano, how long have you been with the NAB? Satellite radio too automated? "Monopoly mediocrity"? "wallpaper music programming"? Nice try. Now get yourself a subscription, a cool drink, and enjoy the future of radio!

Posted by: asd | July 24, 2007 9:33 PM

Personal attacks betray a thin argument....

The merger of XM and Sirius [regardless of the merits of satellite radio, XM or Sirius] would eliminate competition in this medium for some time to come. Other media companies are demanding that the FCC relax media ownership rules in order to allow them to compete with the merged XM/Sirius media giant....all that is going in the wrong direction....regardless of the initial hype, lack of competition is a prescription for higher prices, bad product and frustrated consumers...

Posted by: Listner | July 24, 2007 10:38 PM

NPR is king.

Podcasts are king.

People with XM or Sirius are lame-ohs. LAME.

Posted by: Tom | July 25, 2007 12:30 AM

NPR is king.

Podcasts are king.

People with XM or Sirius are lame-ohs. LAME.

Posted by: Tom | July 25, 2007 12:30 AM

Sirius satellite radio will be around a long time people...I mean have you taken a listen to teresstial radio over the last Five years or so?
It has bleeps and blunders and arrogance so disturbing that you find yourself sitting back in front of the TV just to be able to visualize what the hell everybody is saying.
Point made, satellite radio is the BEST form of radio available, especially SIRIUS.
Lifetime Subscriber as of 2005.

Posted by: Robert C | July 25, 2007 12:53 AM

I like my XM justthe way it is, thank you very much. More DJ chatter and I would drop it.

Posted by: RL | July 25, 2007 7:58 AM

Just wanted to comment about Fred Hills' post indicating he was not in favor of combining XM and Sirius because the two are not technically compatible and a combined receiver would have to contain both chip sets and cost more than either one alone.

The program content of XM and Sirius can be transmitted over both satellite systems--so existing receivers (whether Sirius or XM) could receive the best channels of both. If this required paying a few dollars extra, it would still be a bargain IMHO!

Personally I have ended up purchasing more CD's as a result of listening to both XM and Sirius. They provide exposure to a greater variety of music than can be found on commercial FM stations. True, in my area there are a few local NPR or college stations with quality programming, but if you drive anywhere out of town, you enter a musical desert.

Posted by: Steve | July 25, 2007 2:26 PM

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