XM Satellite Radio posted a wider than expected loss yesterday as a result of extra spending to lure subscribers and disclosed that a director had resigned in a dispute over corporate strategy.
The director, Pierce J. Roberts Jr., said in a letter to XM's chairman that he had been "troubled about the current direction of the company" and had shared his concerns with directors and management without "any useful effect." Without offering specifics, Mr. Roberts, the former head of the telecom investment banking unit of Bear Stearns, said that XM faced "a significant chance of a crisis on the horizon."
He went on, "Even absent a crisis, I believe that XM will inevitably serve its shareholders poorly without major changes now."
Mr. Roberts did not return a telephone call yesterday.
XM, which disclosed the letter in a regulatory filing, said its other directors and management executives disagreed with Mr. Roberts about how to balance the company's drive for growth against its desire for cash flow. Mr. Roberts has favored cutting XM's expenses associated with marketing and creating new programming, while other executives believe the company must maintain its spending to attract subscribers to its pay-radio service.
This guy's got the right idea. I know that XM is the no-talent ass clown as far as satelite radio is concerned, but I had to expect that Mr. Roberts will land on his feet.
