Sirius Taps Clayton As President & CEO

By Amy Gilroy -- TWICE, 11/27/2001

New York - Only hours after being named president and CEO of Sirius Satellite Radio, industry veteran Joe Clayton told TWICE that he planned to draw on the lessons he learned in bringing DirecTV to market at RCA.

Clayton, who joined Sirius this morning, replaces the company's founder and chairman David Margolese, who stepped down as CEO in October.

Clayton, 52, is most well-known for his years in senior management positions with RCA Corp. and the RCA brand, as it became part of the GE Consumer Electronics Division and finally part of Thomson MultiMedia. Most recently he was vice chairman of global Internet and long distance services provider Global Crossing, was previously CEO of Frontier Corp. of Rochester, N.Y. He headed the telecommunications services company until its acquisition by Global Crossing in October 1999.

At Thomson MultiMedia, Clayton was instrumental in the development and launch of the consumer equipment for DirecTV, the nation's largest satellite-to-home television provider.

Clayton said he would draw on his DirecTV experience with Sirius. 'I plan to use a lot of the same elements that we used with the RCA Direct TV and DSS launch. We plan to start with a regional roll out. and we'll do something that we didn't do with Direct TV which is test price sensitivity to the product. With DSS as you know the price was originally fixed at $699. So we will use DSS as a learning curve.'

The new executive stressed that the satellite radio market differs from that of Direct TV, as there are three different types of distribution-aftermarket, OEM and car dealers. But he added, 'I would be misleading you if I didn't plan on using not only the experience but some of the same people to put digital radio into the market.'

Clayton takes the helm after the company has had several delays in the launch of its service, leading analysts to express concern about the company's financial position. A recent report by the Yankee Group noted that if Sirius meets its target release in three markets on February 14, it will launch in the heart of one of the worst quarters predicted for the consumer electronics industry.

Clayton noted however, 'I don't disagree. The numbers so far are showing that Christmas may be an okay selling season but am I concerned that we missed Christmas this year? No way. We will have a ramp that builds into the second half so the economic environment may be favorable for us at that time. We won't gear up for full production until we are into the second half of the year.'

When asked how satellite radio competitor XM was performing since its national launch in mid November, Clayton, noted, 'I've only been here for three hours, but I would say they have not knocked the cover off the ball. A lot of this is due to the learning curve of any new product and the environment is a little difficult right now. The next six months is an uphill battle for all consumer electronics.'

Clayton reiterated that Sirius will be making more detailed announcements about advertising and specific launch phases at the Consumer Electronics Show in January.

Sirius' board seems thrilled with Clayton joining the fold, as indicated by the tone of its prepared statement announcing his hiring. 'Joe's wealth of experience in bringing high-tech products and services to consumers makes him the logical choice to lead Sirius forward. He is a strong manager and a proven leader with a great track record in building stockholder value. He understands technology, but most important, knows how to market and create brands in the consumer electronics field. We are thrilled he is joining the team.'

When asked if Sirius will meet its new launch dates including the February 14 launch in Houston, Phoenix and Denver he said, 'As they say in the South, if the rain doesn't kill the rhubarb and if the creeks don't rise, then yes, I am certain we'll make it.'

Finally, when asked how Clayton will address the problems Sirius has faced in the past, he noted, 'If everything was perfect they wouldn't need me. That's my reputation. I grow businesses and I also fix them. I've been doing this for 30 years.'