Sirius XM being stalked by Dish?

[drdroo]

Don't need to pay the overinflated OEM kit price to convert people. The place I work for sells conversion kits from XM to Sirius for many models for 150$. XM has similar kits to convert Sirius customers for around the same price.

The OEMs that are selling their kits for 400-1200$ are making out very well in that situation.



EDIT: And yes I'm aware those 150$ kits are subsidized by the Satellite Radio company, but the subsidy and the retail price combined is still not likely past 250$.

[david_jr]

I am all for Echostar buying Sirius-xm. Scott and I both agree since the merger that the quality of service especially on the XM side has gone downhill. On top of that they try to raise rates for something that was originally in our 12.95 a month commitment that the FCC mandated for 3 years. I'd be happy for Charlie to take over get rid of most of the dj's and return XM back into "america's largest playlist" again. Go Charlie go.

I signed up with XM in September with a 3 year contract and got free Internet access to most channels included (as did everyone, I believe). I got an email from XM today offering to let me keep the new improved Internet radio for free if I extend my contract. They state in the email that the new price for Internet is $2.99. I had considered adding a second portable unit to my subscription because my 1st unit is OEM Honda Accord. I don't think I would do that now because they raised the price for one and for another I am now worried that Sat radio may not survive. I also considered getting the portable unit and moving my subscription to it and just use it in the cars and at home. Are other people changing their sat radio plans because of what's going on (price increases, possible buyout by Echo or poss DOA soon)?

[PBX_Guy]

The Sirius + XM merger was something of a disaster. The object of most mergers is to combine operations into one, then eliminate 1/2 the overhead. Unfortunately that's not totally possible because the two services' subscriber receivers are incompatible w/each other. It's tantamount to D* and E* trying to merge. What they have done is succeeded in pissing off a lot of subscribers on both sides who were heretofore loyal to specific programming which has subsequently been eliminated, combined or otherwise changed in some unfavorable way (by perception of the subscribers). I'm not particularly happy myself.

This, however, answers the nagging question of conjecture as to what destiny would eventually befall Sirius/XM as subscribers were dropping like flies & the stock (NASDAQ: SIRI) was circling the drain. Anxious to retain subs, XM was prostituting its service (with minimal arm-twisting) for $77 a year. With this development it looks like they may be around for a while longer and those of us with $77 annual subs (still available btw) may have actually landed a pretty good deal. We shall see.

[yaz96]

If you just want to discuss Sat Radio, you might get more info and better responses here - Satellite Radio Forum - SatelliteGuys.US

[ryotgz]

Sirius XM Prepares for Possible Bankruptcy

- Click

Not so good news...

[jadiff]

Yup....


Charlie Ergen Pounces On Sirius XM

[Scott Greczkowski]

Listen to the Podcast.

[Purp1eOne]

Sirius XM Prepares for Possible Bankruptcy

Sign In to E-Mail
Print
Reprints

By ANDREW ROSS SORKIN and ZACHERY KOUWE
Published: February 10, 2009
Last summer, Mel Karmazin was rattling off his trademark one-liners to talk up the future of Sirius XM Radio, the combined company he ran that had just been blessed by regulators.

Skip to next paragraph
Enlarge This Image

Mike Segar/Reuters
Mel Karmazin, chief of Sirius XM

Related
Times Topics: Sirius XM Radio Inc.
Enlarge This Image

David Scull/Bloomberg News
Charles Ergen, EchoStar’s chief.

He was planning to cut costs and expand a business that was already a fixture in the lives of millions of Americans. “Forty-three cents a day — it’s not even vending machine coffee,” he said at the time, parrying a question about whether the softening economy might hurt subscriptions.

But now Sirius XM, the satellite radio company, has problems with much bigger price tags. It has hired advisers to prepare for a possible bankruptcy filing, people involved in the process said.

That would, of course, be a grim turn of events for the normally upbeat Mr. Karmazin, Sirius XM’s chief executive, who had hoped to create a mobile entertainment juggernaut with stars like Howard Stern.

It is unclear how a bankruptcy would affect customers. Service is unlikely to be interrupted, but the company might have to terminate contracts with high-priced talent like Mr. Stern or Martha Stewart.

A bankruptcy would make Sirius XM one of the largest casualties of the credit squeeze. With over $5 billion in assets, it would be the second-largest Chapter 11 filing so far this year, according to Capital IQ. The filing by Smurfit-Stone, with assets of $7 billion, has been the year’s biggest to date.

Sirius XM, which never turned a profit when both companies were independent, is laden with $3.25 billion in debt. Its business model has been dependent, in part, on the ability to roll over its enormous debts — used to finance sending satellites into space and attract talent like Mr. Stern (who was paid $100 million a year) — at low rates for the foreseeable future until it could turn a profit.

The company’s success and failure are also tied to the faltering fortunes of the automobile industry, which sells vehicles with its radio technology installed and represented the largest customer base among Sirius XM’s 20 million subscribers.

Sirius XM owes about $175 million in debt payments at the end of February that it is unlikely to be able to pay.

Sirius XM’s problems could pave the way for a takeover by EchoStar, the TV satellite company, which has bought up Sirius XM’s debt.

Mr. Karmazin has been locked in talks with EchoStar’s chief executive, Charles W. Ergen, over Sirius XM’s options, people involved in the talks said. The men are said not to get along, these people said, and Mr. Karmazin had rebuffed Mr. Ergen’s takeover advances before.

Sirius XM hired Joseph A. Bondi of Alvarez & Marsal and Mark J. Thompson, a bankruptcy lawyer with Simpson, Thacher & Bartlett, to help prepare a Chapter 11 filing, these people said.

Documents and analysis are close to completion and a filing could come in days, according to a person familiar with the matter.

The threat of bankruptcy could also be part of a negotiating dance with Mr. Ergen, who could decide to convert his debt into equity instead of demanding payment.

In addition to the $175 million due in February, EchoStar also owns $400 million of Sirius XM’s debt due in December. If Sirius XM files for bankruptcy, EchoStar could seek in court to take over the company. Mr. Ergen, however, may be able to negotiate to convert his shares before bankruptcy at an attractive rate and gain control of the company, these people said.

For Mr. Karmazin, the sale or bankruptcy of Sirius XM would be one of his first failures. He founded Infinity Broadcasting, sold it to CBS and later merged the combined companies into Viacom, where he had a notoriously difficult relationship with Sumner M. Redstone, the chairman, before being ousted.

Mr. Karmazin bought two million shares of Sirius XM at $1.37 a share in August. Before that, he had bought 20 million shares at an average price of $5 each. On Tuesday, Sirius closed at 11.4 cents a share.

Since the summer, the company’s prospects have dimmed.

“I’m not trying to paint the rosy picture, because we have challenges connected to our liquidity and certainly our stock price is dreadful,” Mr. Karmazin said in December. “But, you know, our revenues are growing double digits. We’re growing subscribers. We’re not losing subscribers.”

A spokeswoman for Mr. Karmazin declined to comment. A spokesman for EchoStar could not be reached.

Mr. Karmazin staked the success of the merger on nearly $400 million in annual cost savings and the potential to gain subscribers through deals with auto companies to put satellite radios into cars.

But satellite radio failed to win over many younger listeners, and competition from other sources slowed subscriber growth.

[Poke]

Yeah be interesting to see how this all plays out..

[BobMurdoch]

Interesting read. I hope there aren't too many Sirius shareholders who are Dish Network subs. Charlie will have even more people against him since the people who own Sirius XM stock will lose big time in this scenario!

Who's got two thumbsand fits this description?

(two thumbs point at myself)

This guy.....

Sigh... Oh well, who needs that college fund for the kiddies anyway... (only a couple of grand, but still.....)