Sirius XM Radio Inc (NASDAQ:SIRI) CEO, Mel Karmazin, will step down, early next year following Liberty Media Corp. (NASDAQ:LMCA)’s takeover. Sirius XM provides radio service in the U.S. and Canada, and broadcasts approximately 135 channels. Mel Karmazin leaves the satellite radio company after clashing with John Malone, whose Liberty Media Corp plans to take a controlling stake in SIRI.

Liberty Media now holds more than 3.24 billion shares of common stock in Sirius XM Radio Inc (NASDAQ:SIRI), which is 49.5 holding in the New York-based broadcasting services company. John Malone’s company has been acquiring stock in Sirius XM since May of this year at an alarming rate, including conversion of some class B-1 shares to common stock.

Karmazin

The company recently, September 17, converted nearly 50% of its 12,500,000 B-1 shares to 1,293,467,684, shares of common stock, and now holds 6,250,100 shares in the B-1 class. On the other hand, Mel Karmazin holds only 8,500,000 shares of common stock in Sirius after converting and disposing several of his class B-1 shares.

Media reports suggest that the 69 year old Karmazin will leave the board, after reports pointed out that he was replaceable. The veteran of the radio industry also clashed with Viacom, Inc. (NASDAQ:VIA) (NASDAQ:VIAB) Chairman, Sumner Redstone earlier in his career, but now claims that Liberty could not afford him.

Pipper Jaffary analyst, James M. Marsh, CFA, notes that this is not a big surprised. He had suggested previously that there was some risk that Karmazin might not continue in his role as CEO following the Reverse Morris Trust transaction. Karmazin was vocal about opposing the Liberty’s takeover and made comments on ‘not being really good at working for somebody’ else. As recently as Sep 20th, Liberty Media CEO Greg Maffei told investors “the business will not fail without Mel”.

David Bank, an analyst with RBC Capital Markets, is quoted by Bloomberg saying, “you have two really big media moguls, Mel did not have a fantastic experience working for Sumner Redstone. Our sense was probably that he did not want to work for another big media mogul. He wanted to be the decision- maker himself, and the future of the company is going to be driven by Malone”.

Malone came to the rescue of Sirius when he offered the company $530 million, helping it avoid bankruptcy, which in turn yielded $1.7 billion within nine months for Liberty Media Corp (NASDAQ:LMCA) (NASDAQ:LMCB). The deal also gave Malone’s Liberty Media Corp (NASDAQ:LMCA) (NASDAQ:LMCB) a 40% stake in the radio services company.

Malone is also said to have Spin-off plans for Sirius, as he seeks to eventually execute a Reverse Morris Trust and distribute the shares to its investors, while avoiding paying taxes on the separation, noted Bloomberg.

“While we understand, we regret Mel’s decision to pursue other interests, and are grateful for his willingness to oversee a smooth and orderly transition,” Malone said in a statement, expressing his appreciation for what Mel Karmazin has done for the company. Reports also suggest that Sirius XM board has constituted a CEO search committee, in readiness for Karmazin’s departure, early next year.

Yesterday, shares of Sirius XM Radio Inc (NASDAQ:SIRI) were down $0.04, or a 1.37% decline, to close at $2.87 per share, while Liberty Media Shares dropped $0.74, or ~0.67%, to close at $110.39 per share, from the previous close.