The Most Valuable Face in Radio

Photographer: Patrick Fallon/Bloomberg

Mel Karmazin, chief executive officer of Sirius XM Radio Inc.

How much is a superstar worth? Two Bloomberg stories today explore that question, in different ways. The first — and this is new territory for The Market Now — is about Broadway, where Al Pacino starts a ten-week run in David Mamet’s Glengarry Glen Ross. Total estimated weekly expenses for the show are $491,295. Those include:

Pacino’s salary: $125,000
Six other actors: $30,000
Theater costs: $110,000

Overall, Pacino’s pay amounts to more than a quarter of the fixed costs of the play. In addition, he’s got profit participation and a 10 percent share of gross ticket sales above $1.25 million a week (an ambitious number). Is one person really worth a quarter of the whole show?

Well, it depends. Consider today’s story about Mel Karmazin , chief executive of Sirius XM Radio Inc. Sirius announced after markets closed yesterday that he’ll leave by February 1, as Liberty Media Corp. completes an anticipated takeover.

Mel Karmazin is one of the great media chief executives, having built much of Viacom Inc. for Sumner Redstone. A lot of folks will say that a record like that is worth a lot — notably Karmazin himself, who has never been shy about advertising his value. Today’s story notes that Karmazin has said he’s “probably too expensive” for Liberty. That’s one of his tamer formulations; Karmazin once told Forbes that he was “one of the most underpaid executives in history.”

Last year Karmazin got paid $10.7 million. His real windfall, though, came in 2009, when he got 120 million stock options priced at 43 cents each. Sirius now trades at $2.87. That makes for $292.8 million in options appreciation; compare that to Sirius XM’s total of $470 million in earnings for 2010 and 2011. That’s up from major losses, and Sirius’s shareholders have certainly gained along with Karmazin, who took Sirius back from the brink of bankruptcy.

Then again: it was also Karmazin who took it to the brink in the first place. So you can call it even, though he does get credit for not bailing out when trouble hit.

The Market Now’s inclination is to say that Al Pacino is easily worth $125,000 a week on Broadway. It’s certainly a lot less than he can expect if he’d spent his time making a movie instead. As for Karmazin, there’s one guy who seems to agree that he’s too expensive for Liberty: Liberty chief executive Greg Maffei, who has called Karmazin “replaceable.”

A version of this post appeared earlier in the Market Now newsletter and at Click here to register at and subscribe to The Market Now daily email.

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