SIRIUS XM Prepares Bankruptcy Filing
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This was taken from a sat. radio news site...
Sirius XM Radio Inc. is reportedly in preliminary talks with Liberty Media, a media conglomerate that owns DirecTV among several other properties, reports the New York Times' DealBook Blog and the New York Post.
An agreement between Sirius XM and Liberty would create a wrinkle in the takeover plans by rival EchoStar, and could save Karmazin from having to file for bankruptcy.
Citing "people briefed on the negotiations," DealBook points out that is not clear how advanced the talks between Sirius XM and Liberty are.
But any potential deal between the two could spark a bidding war with EchoStar.
Liberty Media owns a 48 percent interest in The DirecTV Group, and is controlled by John C. Malone. While Mel Karmazin and Charlie Ergen have been locked in negotiations, these people said, the two are said to not get along very well.
In 2004, after talks broke down between Dish (run by Ergen) and Viacom (run by Karmazin) over channel rate negotiations, Dish published Karmazin's home number and told subscribers to call him.
"I can't imagine Ergen and Mel Karmazin working that well together," Matthew Harrigan, an analyst at Wunderlich Securities, told the AP.
If he manages to strike a deal with Malone, Mel Karmazin would stand a good chance of staying on - in some capacity - at Sirius XM Radio as John Malone is said to have a more hands-off approach.
Also, someone on another board I frequent did the math... Howie Stern is paid $625,000 per radio show. Someone please tell me how they can justify this, he only works four days a week & has the whole month of August off. XM would have made out in the end. It would have been hard, but they would have stayed afloat. Sirius killed sat. radio.Last edited by a moderator: Feb 12, 2009
I hope (and think) they will get this worked out. They did over pay for Stern and doubt he would take one for the team. I listen all the time and love all the choices. I do wish they would add the remaining xm and sirius channels without making you pay for "the best of".
Im sure if they do file bankruptcy that they arent looking to liquidate the company but rather restructure.
They took on alot of debt with the XM merger... but I think they have gone a little overboard with who and what they sign on for content.
Courts will probably have them re-negotiate contracts and dump certain talent.
While Howard Stern's contract was probably way more generous than it should have been, Sirius has been elatated with the subscribers he has brought with him and he has surpased all his contract subscriber marks for bonuses.
20+ million subscribers at 13 buck a month is a little over 3 billion dollars a year. (Subtract for people with life time subscriptions but then ad in the advertising revenue) That is way to much revenue to see Sirius just disappear.
I would predict a re-structure with current ownership, or a take over by echo star. Echo Star just bought some of their debt and had a purchase offer on the table that was rejected earlier this year.
Sirius is the only non-terestrial radio provider and its not going away.
I spent close to 2 grand on an Irridium system way back when -
remember ???- satelite phone - same general tech as XM - only used for phone person to person ...
had it for a month when they went out of biz...
lost EVERYTHING - equipement was junk then - and no one gave me a refund...
now years later - they have reopened their doors - but want a new contract - and act like nothing happened when they went under the first time..
My boss even offered to pay for it for me and I still don't have it. I suppose some day I may though so I hope they stay around
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