So why exactly does Mel Karmazin get to be the CEO?

Something's been bothering me about the XM-Sirius merger. Everything I've read seems to point to XM being the better-run of the two satellite radio rivals. Hugh Panero, the CEO since 1998, got his company's radios to market first, signed better distribution deals than Sirius did, and has been running a significantly tighter ship. This morning, XM reported that its losses dropped dramatically in the fourth quarter, and that its cash flow from operations had actually swung into positive territory for the first time.

Meanwhile, over at Sirius, Mel Karmazin showed up in 2004 and has been spending money like crazy ever since in an effort to catch up.

So who gets to be CEO of the combined company? Karmazin. And who has to find a new job? Panero.

There is a certain twisted stock market logic to this. Karmazin's reputation as a media empire-builder and his bold (if expensive) moves to lure the likes of Howard Stern (the centerpiece of Karmazin's previous media empire at Infinity/CBS/Viacom) to Sirius have boosted the company to a higher market value than its bigger rival.

But as Andrew Ross Sorkin pointed out in yesterday's Times, the deal is structured as if XM and Sirius were worth the same amount. Karmazin justified this to Sorkin as a sacrifice he had to make to get the deal done. It might also be that the dealmakers know something that Wall Street, blinded by Karmazin's star power, seems unable to recognize--that XM might be the better company. Yet it is XM's CEO who is headed for the exits. Weird, eh?