Thread: Sirius XM / Liberty Reach Deal

Winners today.....

1. Charlie. OK, he didn't get control... he just made 5-10x his investment back since the debt gets paid in full for the 10 cents on the dollar (or whatever he paid for it) he paid out. He could have lost it all in bankruptcy, but Mel would have had a shareholder revolt if he did that.

2. Sirius stockholders. -- OK, if you paid $2-9 a share for the stock, it's hard to call you a "winner" at 20 cents a share, but the fact your stock isn't worthless, is a plus. Basically, this liberty "rescue" plan, diluted their shares another 40%, but no one is complaining as the stock goes up 90% in a day on when EVERY other stock on Wall Street is tanking today because Wall St. is finally voting with its' feet on the Obama stimulus plan and heading for the exits....

3. Liberty - They invest a chunk of cash, but get in cheap on an enterprise that still is chock a block full of assets.

4. Mel Karmazin - rumors of his demise are greatly exaggerated. He holds Charlie at bay (and saves his job), he holds the stockholders at bay (and saves his job), and he lives to fight another day (and saves his job). Um, he saves his job.

5. Howard Stern, Martha Stewart, NFL, MLB, NHL, NBA, NASCAR, other high priced contracts.... They all keep their contracts intact. A bankruptcy would have scotched their sweetheart deals which NO ONE would replace...

6. Subscribers - Although unlikely to lose the service outright, a bankruptcy would likely have severely cut the quality of the programming even further than they already did when they merged the two services. They still will get billed more for extra radios and the online service, but the service is intact. Especially for those "lifetime" subscribers, who found that a lifetime might only be a few years.

Good list Bob.

One question..... Is ALL the 2009 debt behind them now, or is there still a huge time bomb coming down the calendar at them......?

Now with one "buyer" of high priced contracts like Howard, MLB, NASCAR etc, can we assume the price of those contracts will be considerably less when they come up for renewal?

Howard need to take a huge paycut along with the rest if they want to continue to get paid when the contract come due.

Originally Posted by BobMurdoch

Winners today.....

1. Charlie. OK, he didn't get control... he just made 5-10x his investment back since the debt gets paid in full for the 10 cents on the dollar (or whatever he paid for it) he paid out. He could have lost it all in bankruptcy, but Mel would have had a shareholder revolt if he did that.

2. Sirius stockholders. -- OK, if you paid $2-9 a share for the stock, it's hard to call you a "winner" at 20 cents a share, but the fact your stock isn't worthless, is a plus. Basically, this liberty "rescue" plan, diluted their shares another 40%, but no one is complaining as the stock goes up 90% in a day on when EVERY other stock on Wall Street is tanking today because Wall St. is finally voting with its' feet on the Obama stimulus plan and heading for the exits....

3. Liberty - They invest a chunk of cash, but get in cheap on an enterprise that still is chock a block full of assets.

4. Mel Karmazin - rumors of his demise are greatly exaggerated. He holds Charlie at bay (and saves his job), he holds the stockholders at bay (and saves his job), and he lives to fight another day (and saves his job). Um, he saves his job.

5. Howard Stern, Martha Stewart, NFL, MLB, NHL, NBA, NASCAR, other high priced contracts.... They all keep their contracts intact. A bankruptcy would have scotched their sweetheart deals which NO ONE would replace...

6. Subscribers - Although unlikely to lose the service outright, a bankruptcy would likely have severely cut the quality of the programming even further than they already did when they merged the two services. They still will get billed more for extra radios and the online service, but the service is intact. Especially for those "lifetime" subscribers, who found that a lifetime might only be a few years.

Good ones, the only comment I have is regarding #6, I took the advantage of the great GM incentives for loyal customers and traded in my old truck for a new one a few days ago, this Sirius rescue will allow me to enjoy the three months free Sirius radio without interruption

A few days ago I thought my newly acquired truck would have a useless piece of electronic junk with a piece of ugly antenna on the roof top. Now such reality is pushed back

It's complicated but we'll soon see many solid well run companies face the same debt problem. What we witnessed is not about too much overhead, or bad management it's about the rules and attitudes suddenly changing regarding corporate financing. Short term debt funding which almost all businesses have to use to operate is suddenly being denied by the lenders. The same lenders who on the other hand hold the contracts and set the rules for the debt.

There is no authority that knows what to do at this time. The theories that created this system have just all failed. More chaos will occur. Sirius/XM, Echostar, Liberty situations will be the success stories this year. IMHO

Originally Posted by Scott Greczkowski

Good list Bob.

your avator is killing me!! LOL

Charlie . . . now with your new windfalls it is time to pony up for some of the contracts and stick it to Direct by getting ahead with HD Channels . . . what a great opportunity for Charlie . . . take Directs money and move ahead as HD leader . . . am I crazy thinking this?

Originally Posted by Scott Greczkowski

Good list Bob.

Thanks, your avatar is an especially accurate metaphor for what Sirius stockholders have been going through for the better part of the decade....