Sirius XM Prepares Bankruptcy Filing

**sundude90** · 02-10-2009 08:09 PM

I would rather like to haveDirectv to buy SiriusXM. NOT Dish.

**DJ Rob** · 02-10-2009 08:13 PM

Originally Posted by rad

The reason I went with Sirius was to get away from commercials and all the yacking that was on our stations. I do agree that they spent WAY too much money on Stern, it did bring some customers over but not enough to cover his contract.

Where are you getting your figures on this?

If you do the math, he brings profit to Sirius.
The total budget for both of his channels is about $100,000,000 a year including Howie's salary. Even without taking in consideration the thousands of dollars Sirius makes on the commercials that run on 100 and 101, they just needed about 700,000 paid subs to cover the operating expenses.

The Oprah and Martha Stewart contracts were probably a bust though...

**apollog** · 02-10-2009 08:15 PM

Originally Posted by DJ Rob

They weren't being greedy. They were trying to make enough to be able to pay the notes due this month so they could stay in business...

They were greedy, buying up the competition so they can run a monopoly. Now, if they go under, there is no one else to offer Sat. radio service.

**DJ Rob** · 02-10-2009 08:32 PM

Originally Posted by apollog

They were greedy, buying up the competition so they can run a monopoly. Now, if they go under, there is no one else to offer Sat. radio service.

They didn't do it to "run a monopoly".

Before the merger, XM was about to go under. And Sirius wasn't much better since to keep up they spent money on VERY inflated contracts (ie NFL, Baseball, etc.) because of having XM as a competitor. They merged the two companies to try to stay in business by consolidating operating costs.

In addition to a few bad decisions and a bad economy, the 2 years it took the government to approve the merger was what really hurt satellite radio since both companies were stuck in a holding pattern.

**flyingsquirrel** · 02-10-2009 09:18 PM

Originally Posted by Scott Greczkowski

Yes indeed, if Sirius files for Bankruptcy now, all that debt Charlie purchased could be worthless. It appears that Sirius XM is trying to fend off Charlie.

Not sure who to root for here.

Unlikely to be worthless long term. The debt would more likely be converted to stock in the new company that would emerge from Bankruptcy.

**meStevo** · 02-10-2009 09:28 PM

The length of the merger approval process sealed their fate IMO. Left them restructuring during a crappy economy where people are cutting back in addition to recovering from the high cost of competing against each other before becoming 1 entity.

**Nabber** · 02-10-2009 09:31 PM

Just got a 1 year XM sub with my new Genesis. While I like much of the content, their sound quality is garbage on a 7.1 system. I hope they go under and someone resurrects them with a new business model based on near-HD quality audio.

**drdroo** · 02-10-2009 09:39 PM

Originally Posted by sundude90

I would rather like to haveDirectv to buy SiriusXM. NOT Dish.

I disagree. DirecTV themselves have been passed around like a prison inmate several times over.

Charlie knows how to handle finances overall, he's just not so great with customers. This could be interesting.

**drdroo** · 02-10-2009 09:41 PM

Originally Posted by Nabber

Just got a 1 year XM sub with my new Genesis. While I like much of the content, their sound quality is garbage on a 7.1 system. I hope they go under and someone resurrects them with a new business model based on near-HD quality audio.

I doubt it. If they did that, then they'd have 10 channels and they'd lose a majority of their customers.

Satellite Radio is about variety. The audiophiles have claimed time and time again that it would be wonderful to have such a service as you describe. The reality is that I'm not the kind of person that pays 1000$ for cables, and I'm not the kind of person that would buy Satellite Radio for 10 channels.

The 1000$ cables crowd usually doesn't have any interest whatsoever in Rock Alternative. Just sayin...

**rad** · 02-10-2009 10:18 PM

Originally Posted by DJ Rob

Where are you getting your figures on this?

If you do the math, he brings profit to Sirius."
The total budget for both of his channels is about $100,000,000 a year including Howie's salary. Even without taking in consideration the thousands of dollars Sirius makes on the commercials that run on 100 and 101, they just needed about 700,000 paid subs to cover the operating expenses.

The Oprah and Martha Stewart contracts were probably a bust though...

Probably the same place you get your numbers, how about from
http://www.nypost.com/seven/01102007...er_lauria.htm:

"January 10, 2007 -- Happy anniversary Howard Stern - here's $83 million.

That's the cash value of the 22.1 million shares of common stock Sirius Satellite Radio awarded the shock jock for exceeding subscriber growth targets by more than 2 million during his first year on uncensored radio.

Combined with his original five-year, $400 million contract and the $220 million in stock Sirius granted him last January, the value of Stern's total compensation has just topped $700 million"

Yea, a lot of it was stock which is worth about a roll of toilet paper now but it had to help delute the value of the stock and the company.

Or
Sirius Satellite Radio and Howard Stern Go Ear to Ear with XM - Knowledge@Wharton

"No matter how this saga unfolds, Stern won't come cheap. Jonathan Jacoby, an analyst at Banc of America Securities, estimates that the true cost of Stern's contract will be about $670 million, including non-cash compensation. Stern and his agent, Don Buchwald, were awarded 34 million shares valued at about $200 million last month for bringing in more subscribers than expected. Fader finds it hard to defend Stern's compensation. While it's possible to cook up metrics to justify the deal, what remains to be seen is whether Stern's fans stick with Sirius. "A lot of them bought Sirius just for Stern, but there could be lower retention rates. It's very hard to imagine that the acquisition of one person, even if it is someone as popular as Howard Stern, will be enough to keep Sirius afloat for long," he says."

Unless we actually know who signed up ONLY for Stern and what their monthly bill is who knows for sure, I just said what I thought. The numbers I've seen assume that folks are paying the regular monthy charge for service. It doesn't take into account people that sign up for annual or lifetime service (I have lifetime and basically have been getting it for free now for three years).