# Sat Radio and Liberty Media Reach Deal



## MLBurks

The deal is done!

http://www.orbitcast.com/archives/breaking-sirius-xm-radio-and-liberty-media-reach-530-million-agreement.html


----------



## Richard King

> Liberty will loan Sirius XM Radio $280 million; $250 million of which will be funded today. The loan will bear an interest radio of 15%


I assume he meant interest rate of 15%. WOW. That's a ton of interest. But then when you are over a barrel I guess you pay it.


----------



## Richard King

> Upon completion of the second phase of the Liberty investments, Sirius XM will give Liberty a total of 12.5 million shares of preferred stock *convertible into 40% of the common stock of SIRI*.


There's the dillution to current shareholders.


----------



## Richard King

Under 15% annual interest Liberty doubles their money in just under 4 years, about the time that the loan comes due. When it's all done in 2012, SIRI will have paid out interest of just under 250 Million and still owe $250 Million in principle.


----------



## Richard King

DirecTv stock is getting totally slammed this morning. It has held up fairly well through everything recently. This move today has it down nearly 8% before hours. Then again, Dish is also getting slammed which surprises me.


----------



## Ken S

Gotta give Mel some credit here...he has saved control of the company and kept them out of bankruptcy.


----------



## Steve615

Here is a PR from Yahoo & AP,posted about 50 minutes ago.

http://news.yahoo.com/s/ap/20090217/ap_on_bi_ge/sirius_liberty

Liberty Media Corp. will invest $530 million in financially struggling satellite radio company Sirius XM Radio Inc.


----------



## wilsonc

Richard King said:


> Under 15% annual interest Liberty doubles their money in just under 4 years, about the time that the loan comes due. When it's all done in 2012, SIRI will have paid out interest of just under 250 Million and still owe $250 Million in principle.


How do you figure that? In using a simple interest formula, I get $150,000,000 in interest in 4 years and using a compounding interest formula, I get $187,251,526.50 in interest.


----------



## Steve615

PR from Liberty Media Corp.

http://ir.libertymedia.com/phoenix.zhtml?c=61138&p=irol-newsArticle&ID=1256968&highlight=


----------



## Steve615

PR from Sirius XM.

http://investor.sirius.com/releasedetail.cfm?ReleaseID=365423


----------



## Richard King

wilsonc said:


> How do you figure that? In using a simple interest formula, I get $150,000,000 in interest in 4 years and using a compounding interest formula, I get $187,251,526.50 in interest.


http://en.wikipedia.org/wiki/Rule_of_72
I was off by a year. Still, not much difference though on a compounded basis.


----------



## Tom_S

Ken S said:


> Gotta give Mel some credit here...he has saved control of the company and kept them out of bankruptcy.


For the moment. Paying off debt with more debt with a crappy rate(for Sirius) is not necessarily great management.


----------



## scott72

Ken S said:


> Gotta give Mel some credit here...he has saved control of the company and kept them out of bankruptcy.


Yeah but they're just delaying the inevitable now. Come on, 15%?


----------



## scott72

I'm glad I got locked in for my $77 for the next year already, as I don't think they're going to be as generous with deals now that they'll be around for another 3.5 yrs at least.


----------



## redfiver

Tom_S said:


> For the moment. Paying off debt with more debt with a crappy rate(for Sirius) is not necessarily great management.


it's not a bad idea. SiriusXM still generates tons of revenue, they just needed to restructure their near-term debt to get over the hump of startup costs. They did this why retaining control of the company so they can execute their long term plans to increase profits and shareholder value. I think Mel did a pretty good job of getting this done. Lets give him a chance to actually execute on all the plans they talked about pre-merger.


----------



## hdtvfan0001

Liberty is making money....SM is not.....if not for the 15% interest..this would be a financial debacle for Liberty.


----------



## Reggie3

hdtvfan0001 said:


> Liberty is making money....SM is not.....if not for the 15% interest..this would be a financial debacle for Liberty.


and in the end will it allow Liberty to obtain the company when it defaults on the interest payments?

I'm not a lawyer nor do I play one on TV


----------



## Ken S

Tom_S said:


> For the moment. Paying off debt with more debt with a crappy rate(for Sirius) is not necessarily great management.


The other choice was going to be bankruptcy and a control fight that may have led to liquidation. Obviously 15% isn't great...but the 40% share in the company is the key to Liberty...If the company is profitable on a cash flow basis they'll have a large piece and perhaps be able to then deal for control.


----------



## Ken S

hdtvfan0001 said:


> Liberty is making money....SM is not.....if not for the 15% interest..this would be a financial debacle for Liberty.


They got a large piece of a company with 20M subs and $2B a year in gross income. They could end up with control for an investment of 25% of the annual gross...that could be a very good deal for Malone.


----------



## kwajr

what does this do for the debt echostar bought up,did liberty just pay that off basicly.


----------



## tcusta00

kwajr said:


> what does this do for the debt echostar bought up,did liberty just pay that off basicly.


As I understand it the $175MM pile of debt that was threatening to bankrupt the company was about to mature this month (tomorrow maybe, IIRC). So yes, since they now have the cash they are able to effectively refinance that debt.


----------



## neocharles

So what's this mean for us D*TV Subscribers?


----------



## Ken S

It means you can subscribe to Sirius XM and not have to be concerned about a bankruptcy anytime soon.


----------



## tcusta00

neocharles said:


> So what's this mean for us D*TV Subscribers?


Probably not much. I'm just speculating here, but _maybe_ some more music channels that XM/Siri didn't allow on DirecTV before?


----------



## MLBurks

neocharles said:


> So what's this mean for us D*TV Subscribers?


I would bet that it doesn't mean anything.


----------



## cartrivision

Richard King said:


> DirecTv stock is getting totally slammed this morning. It has held up fairly well through everything recently. This move today has it down nearly 8% before hours. Then again, Dish is also getting slammed which surprises me.


I doubt that the drop in the stock price has much to do with the Sirius XM deal. Just about every stock to getting slammed this morning, and besides, it's not DirecTV who did the deal with Sirius XM, it's one of DirecTV's owners.


----------



## cartrivision

Tom_S said:


> For the moment. Paying off debt with more debt with a crappy rate(for Sirius) is not necessarily great management.


Considering that the alternative was bankruptcy, I'd call it pretty good management that made the best they could out of a bad situation for both Sirius XM's stockholders and their customers.


----------



## lucky13

neocharles said:


> So what's this mean for us D*TV Subscribers?


Press reports speculated on business synergies--perhaps package deal for sat TV and radio rights with sports leagues. Perhaps -- a big perhaps -- this would lead to a package price for subscribers. (I realize the sports packages are included in the sub price on S/XM, but we're just speculating here.)

For me, I'm looking forward to updating the software in my satellite radios every Friday night.


----------



## cartrivision

lucky13 said:


> Press reports speculated on business synergies--perhaps package deal for sat TV and radio rights with sports leagues. Perhaps -- a big perhaps -- this would lead to a package price for subscribers. (I realize the sports packages are included in the sub price on S/XM, but we're just speculating here.)
> 
> For me, I'm looking forward to updating the software in my satellite radios every Friday night.


And perhaps MRL (Multi-Room Listening) in one of those future software updates. :grin:


----------



## dcowboy7

why does it say just xm on the channels & not sirius/xm ?


----------



## ibooksrule

Maybe we will see better programming. I was hoping mel would get kicked out and someone with a since of good programming would come in


----------



## wilbur_the_goose

Yeah - any idea if Mel will be fired? (I sure hope so)


----------



## MSoper72

Would this change any for a Dish Network subscribers? Cause I am a current Dish Network and a Sirius/XM subscriber. Would this deal have the channels removed from Dish Network or not at all?


----------



## ThunderRoad

For the foreseeable future, I doubt it'll affect Dish that much. Liberty owns portions of TV networks that are part of Dish Network's lineups. I don't see why the Sirius-XM music channels would be any different. However, if it would get to the point where Directv & Sirius-XM started doing any sort of cross-promoting, things might change. But I don't foresee that happening.


----------



## ibooksrule

wilbur_the_goose said:


> Yeah - any idea if Mel will be fired? (I sure hope so)


Maybe so he has not done a good job with the company or they would not be in this trouble they are in


----------



## Dolly

scott72 said:


> I'm glad I got locked in for my $77 for the next year already, as I don't think they're going to be as generous with deals now that they'll be around for another 3.5 yrs at least.


And by that time I will have made a profit on my lifetime sub :hurah: Thank you Mr. Malone :sunsmile:


----------



## Dolly

wilbur_the_goose said:


> Yeah - any idea if Mel will be fired? (I sure hope so)


No Mel will stay it is still his company. It is just that now Liberty Media will have a stake in the company. I am interested is seeing what will happen with Sirius XM without the debt worries. Mel handled the merged channels badly that part is true, however, Mel was NOT the one that made those big contract deals which was the cause of the big debt. Mel was not at Sirius when those deals were done. So I say give the man a chance under this new situation. As another poster pointed out somewhere else Mel has been sucessful at other places. It's just that the merger took too long and there was all that debt already there plus the credit problems that happened at the very worse time for Sirius XM.


----------



## SDizzle

Look at the obvious, Liberty made a good move, Mel was desperate, 15% is unreal.....they make great money on interest while Siri XM pays....then when Siri XM can't pay....easy takeover time for Liberty!


----------



## Dolly

SDizzle said:


> Look at the obvious, Liberty made a good move, Mel was desperate, 15% is unreal.....they make great money on interest while Siri XM pays....then when Siri XM can't pay....easy takeover time for Liberty!


If they want to take over and what about the FCC? I had read somewhere that the deal with Charlie had most of the things worked out with the FCC, but Mel didn't want the deal with Charlie because while Mel would still remain it wouldn't still be Mel's company. But no FCC details were given about that deal because, of course, it never happened.


----------



## Calvin Jones

Not a bad deal for Charlie. He probably got a sweet deal (pennies on the dollar) for the Sirius/XM debt and now that debt gets paid off. Sure it is not the grand prize he was shooting for but not a bad consolation prize.


----------



## cartrivision

ibooksrule said:


> Maybe so he has not done a good job with the company or they would not be in this trouble they are in


Karmazin wasn't and isn't the problem. More to blame for the current troubles of Sirius XM is the inexcusable delay that the feds caused for the merger process, and the horrible economic conditions that the whole country is in. Karmazin is attempting to save this company from bankruptcy despite some very adverse conditions that he has no control over.


----------



## neocharles

lucky13 said:


> For me, I'm looking forward to updating the software in my satellite radios every Friday night.





cartrivision said:


> And perhaps MRL (Multi-Room Listening) in one of those future software updates. :grin:


That'd be epic.



> DirectTV already offers music from the Sirius XM service, but it could market the products to customers for use in their cars at a fraction of the current $12.95 monthly subscription fee for Sirius XM. Liberty could also harness unused satellite spectrum controlled by Sirius XM to offer more channels of video.


http://www.businessweek.com/technology/content/feb2009/tc20090217_351375.htm?campaign_id=rss_daily


----------



## Richard King

Sirius Bonds Trade Higher On Liberty Media Deal 
http://custom.marketwatch.com/custom/tdameritrade-com/html-story.asp?guid={69997928-6db6-4325-b0a4-9ea4743e7a5f}


> Sirius XM Radio Inc.'s (SIRI) bonds rose Tuesday, nearly doubling in price, as a deal with Liberty Media Corp. ensured the company will live to fight another day.


I would LOVE to know what Charlie paid for the bonds that came due today. He may have doubled his money in a very short term investment. I suspect it may be in the next quarterly report.

The plot thickens (again)....


> However, "the company is not out of the woods yet," wrote KDP Advisor analyst Matthew Wilcox. *This deal funds maturities through May, but won't cover the notes EchoStar owns that come due in December*, Wilcox wrote.


Could it be that Charlie collected enough today to cover the cost of the bonds that he holds that are due in December? Who's going to bail out SIRI in December? Is more equity going to be given away?


----------



## Brandon428

wilsonc said:


> How do you figure that? In using a simple interest formula, I get $150,000,000 in interest in 4 years and using a compounding interest formula, I get $187,251,526.50 in interest.


I wonder what plans they have for the .50 cents?:lol:


----------



## gregjones

Brandon428 said:


> I wonder what plans they have for the .50 cents?:lol:


They'll do what everyone would do with 50 cent: get rich or die tryin.


----------



## jhillestad

Richard King said:


> Under 15% annual interest Liberty doubles their money in just under 4 years, about the time that the loan comes due. When it's all done in 2012, SIRI will have paid out interest of just under 250 Million and still owe $250 Million in principle.


I calculated 333,968,979.13 total with interest......

250,000,000 at 15% for 4 years is 6,957,687.07 payment per month .
Total interest : 83,968,979.13

Loan Amount: 250000000.00
Annual Interest Rate: 15.00000%
Number of Years: 4.000000
Periods per Year: 12
Payment per Period: 6957687.07


----------



## Dolly

Richard King said:


> Sirius Bonds Trade Higher On Liberty Media Deal
> http://custom.marketwatch.com/custom/tdameritrade-com/html-story.asp?guid={69997928-6db6-4325-b0a4-9ea4743e7a5f}
> I would LOVE to know what Charlie paid for the bonds that came due today. He may have doubled his money in a very short term investment. I suspect it may be in the next quarterly report.
> 
> The plot thickens (again)....
> 
> Could it be that Charlie collected enough today to cover the cost of the bonds that he holds that are due in December? Who's going to bail out SIRI in December? Is more equity going to be given away?


I read where Mel had already paid some of the December's debt down. And remember Liberty is going to be giving Sirius XM more money later on. So I think for now Charlie can forget about being the owner of Sirius XM. I say for now because this soap opera has had more twists and turns than any road in my home state--and believe me that is a lot of twists and turns :lol:


----------



## racermd

cartrivision said:


> And perhaps MRL (Multi-Room Listening) in one of those future software updates. :grin:


What? Your radio doesn't go to 11? If you want MRL, just CRANK IT UP!


----------



## racermd

Dolly said:


> And by that time I will have made a profit on my lifetime sub :hurah: Thank you Mr. Malone :sunsmile:


Last I checked into XM pricing, while an annual subscription was an option, you only paid a years-worth of the current rate (as paid quarterly). As a result, if the rates went up during the year, your 4th quarter was essentially screwed and you'd find out when the radio didn't work.

It was outlined in the fine print of the subscriber agreement (along with a nice mandatory arbitration clause), so I ate it for a total of two years and canceled when I couldn't take the abuse any more.


----------



## anubys

cartrivision said:


> Karmazin wasn't and isn't the problem. More to blame for the current troubles of Sirius XM is the inexcusable delay that the feds caused for the merger process, and the horrible economic conditions that the whole country is in. Karmazin is attempting to save this company from bankruptcy despite some very adverse conditions that he has no control over.


:up:

FCC and the financial collapse is the culprit...I can't think of a better radio/salesman to lead this company better than Mel...

some of the December debt is already moved to 2011...the May debt will get paid with the additional loan (at least most of it) and the rest of the December debt will be paid with revenue that is generated between now and then...

Mel saved the shareholders...if only he can sue the FCC!


----------



## davidatl14

anubys said:


> :up:
> 
> FCC and the financial collapse is the culprit...I can't think of a better radio/salesman to lead this company better than Mel...
> 
> some of the December debt is already moved to 2011...the May debt will get paid with the additional loan (at least most of it) and the rest of the December debt will be paid with revenue that is generated between now and then...
> 
> Mel saved the shareholders...if only he can sue the FCC!


Very well stated and I am in total agreement.

The FCC's behavior, coupled with the shameful Congressional Committee hearings on this were an absolute disgrace.

Maxine Waters couldn't even be troubled to pronounce Mel's name correctly, after sitting in the hearing and listening to the proper pronounciation of his name repeatedly.


----------



## Dolly

racermd said:


> Last I checked into XM pricing, while an annual subscription was an option, you only paid a years-worth of the current rate (as paid quarterly). As a result, if the rates went up during the year, your 4th quarter was essentially screwed and you'd find out when the radio didn't work.
> 
> It was outlined in the fine print of the subscriber agreement (along with a nice mandatory arbitration clause), so I ate it for a total of two years and canceled when I couldn't take the abuse any more.


Mine is a LIFETIME (not annual) sub which XM just started to use late last year. I think as an attempt to get more money and stupid me paid for it to try to help the company stay afloat. I thought I could save Sirius XM by myself :lol: I soon found out my pockets were not that deep :nono: And I didn't know what would happen to my lifetime sub if Sirius XM didn't meet that Feb 17th debt. Thank goodness for Mr. Malone :sunsmile: Sirius had the Lifetime sub for a long time may be since they started-- I'm not sure how long because I didn't and don't have Sirius.


----------



## Davenlr

I am in my vehicle about 2500 miles a week, and where I drive, FM radio isnt an option, so I love XM. I was interested in the "cd quality" internet usage as well. When I got the Email saying they were dropping the internet from my account and wanting me to subscribe for a set period to keep internet, I checked here. Seeing Dollys comment that they offered a lifetime sub with internet, for the cost of a 3 1/2 yr (approx) sub, with lifetime internet included, I just had to go that route. My only concern was the $75 transfer fee if my radio breaks, but Ill chance it  Thanks for the info Dolly. There wasnt anything on their web site that I could find, that showed they offered a Lifetime sub.


----------



## Dolly

Davenlr said:


> I am in my vehicle about 2500 miles a week, and where I drive, FM radio isnt an option, so I love XM. I was interested in the "cd quality" internet usage as well. When I got the Email saying they were dropping the internet from my account and wanting me to subscribe for a set period to keep internet, I checked here. Seeing Dollys comment that they offered a lifetime sub with internet, for the cost of a 3 1/2 yr (approx) sub, with lifetime internet included, I just had to go that route. My only concern was the $75 transfer fee if my radio breaks, but Ill chance it  Thanks for the info Dolly. There wasnt anything on their web site that I could find, that showed they offered a Lifetime sub.


You are very welcome :sunsmile: I'm always happy to help Sirius XM and believe me they need help. For a company that still needs money I don't know why in the world the lifetime sub information has never made it onto their website


----------



## ddobson

Mel has always been brilliant. IMO they're seriously damaging XM and Sirius and I most likely will be dropping my sub next month. I chose XM over Sirius for 2 reasons and now they're both gone. NASCAR was one, yeah I know I can get it but no thanks. Now Bruce Williams is being pulled from 4 hours to 1 by XM. 

Mel is great at managing the business side, now he needs to manage the customer side. Everything I wanted in Satellite radio is almost gone unless I want to pay more or upgrade radios. I have a CD changer and can make my own CD's and HD radio is coming along in Chicago.. Between the two I can get the music I want, it was other stuff I wanted out of satellite and its all going away now... 

Oh not to mention the combined traffic channels. I HATE THAT!!!!!


----------



## pez2002

alt nation ch 47 is horrible they play stuff that i never heard before
and on top of that the djs talk wayyyyyyyy too much 

i miss 90s rock channel lucy


----------



## Dolly

I agree that Mel needs help on the customer side--big time HELP!!!!!! That is why I had hoped that Liberty especially the people with D* could help Mel. Mel had to make unpopular moves to try to save money that wasn't Mel's fault the debt was there before he was. However, it was the way he merged the channels together that was the real problem IMHO. People that aren't Forum members or at least Forum readers had NO idea that the change was even coming!!!!!!!! It would be like me turning on my TV and finding D* had changed its' whole programming WITHOUT a word being said. That would NEVER happen :nono: And it shouldn't have happen with Sirius XM :nono2:


----------



## dervari

Richard King said:


> When it's all done in 2012, SIRI will have paid out interest of just under 250 Million and still owe $250 Million in principle.


This could be another hint that there is going to be a paradigm shift or the end of the world on Dec 21, 2012, since the Myan Calender ends then. :lol:


----------



## Dolly

To me Sirius XM is like a boat with a hole in it. Everyone is so busy trying to get the water out of the boat that no one is even trying to fix the hole


----------



## Ozwalt

The challenge for SiriusXM, Directv, etc. is that satellite services become a luxury item during a recession. If you can't keep the house heated, the first thing to go will be anything other than basic cable. If I cancel my SiriusXM subscription, I can put another 5 gallons of gas in the car each month (maybe).


----------



## Jtaylor1

*Liberty doesn't plan to merge Sirius, DirecTV*


----------



## Dolly

Jtaylor1 said:


> *Liberty doesn't plan to merge Sirius, DirecTV*


I don't think they could even if they wanted to. I think that would involve another Dept. of Justice/FCC decision which I don't think anyone would want :nono2:


----------



## mreposter

No merger, but how about a bundle (you want fries with that? I mean, Sirius with that?)
http://www.mediabiz.com/news/articles/?edit_id=11156

Maybe, according to remarks make Wednesday by Liberty Media CEO Gregg Maffei. On a call with industry analysts discussing his company's quarterly financial results, Maffei reportedly said: "One could talk about or imagine bundles, probably the $80 [per month] DIRECTV product offering free trials of the $11 [monthly] Sirius XM product more likely than the other way around. I certainly think those are things we have talked about."


----------



## Dolly

Yes they did mention may be doing that, but I'm an XM lifetime sub now so it wouldn't help me a bit :nono2: Plus my D* bills are already too high to have anything else added


----------

