Sirius XM being stalked by Dish?

I suspect it will be most advantageous to Charlie to just buy/take over certain assets. Best be rid of all liabilities, including deals with the FCC & pricing limitations and expectations. And to avoid dealing with the FCC as much as possible. He hasn't exactly received sympathetic hearings in the past.

Of course, for whatever use he plans to put the assets, he'll be talking with regulatory agencies. But he could offer a considerably different service and consumers might not expect such low prices. This could get very interesting. Synergy. But will that involve keeping the system where at least one set of the existing radios can remain in use?
 
If charlie bought up sirius/xm I wonder if directv would still carry it in there programming lineup? I don't think they would like the idea of having to pay charlie.

When DirecTV was owned by News Corp, Charlie had to pay them for FOX TV channels.

In that situation, the FCC has mandated that you must provide content at fair prices to your competitors.

But, I think the reverse situation is in play:

If EchoStar buys SiriusXM, then Charlie can offer "bundled" packages - such as:

* America's Everything Pack includes SiriusXM Radio in your car
* SiriusXM Radio counting as a $10 premium addition to DVR Advantage

etc.

PS Note that since the merger agreements with the FCC are required for the Satellite Radio License, then any bankruptcy would affect business contracts, but not the license. The FCC can simply refuse to continue the license if the reorganized satellite radio business does not follow the existing FCC agreement.
 
Ultimately it would make Charlie look more attractive for sports too. Why cater to just TV when you could cater to Satellite Radio and to TV? Charlie might actually get more favorable situations with sports as result.

It could go the other way too, of course. :)
 
Hopefully Charlie would be able to negotiate some of the more expensive content like Stern & Oprah downward, but perhaps could also offer them TV deals in exchange for charging less for radio. What if Stern got "Howard TV" as a 24/7 channel (or two) on E*? Fans could watch him live on TV.

Would Oprah perhaps be willing to offer her radio channel to SXM cheaper if E* would also carry the new Oprah Winfrey Network (TV channel)?

Think of the synergy! Charlie could offer a "multi media" package for both content producers & consumers.

That's brilliant thinking, good for customers, and makes good business sense.

So, forget about Echostar/Charlie doing it..........
 
Fox news just flashed a slate that said Sirius needs 175 million to keep Echostar from taking control.
 
Fox news just flashed a slate that said Sirius needs 175 million to keep Echostar from taking control.

I see a win win for Echostar. Either they pickup Sirius XM cheap or they get their debt paid dollar for dollar instead of whatever discounted rate Echostar bought it.
 
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 believe that would net him an additional 6 sattelites...Only would need three for radio....

You need all 6 - 3 for xm, 3 for sirius - otherwise you would loose half subscribes. Untill everyone has a radio that can pickup both, you need to keep all sats. Unless Dish wants to loose half subscribes?
 
Charlie could also offer some type of hardware swap for the half that are affected.

I'm sure all those OEM radios will be cheap to replace. Wonder how many Benz owners will like having their Sirius radio swapped out or if Charlie will want to give a discount on a $1200 Benz radio. Let's see, give 1M Benz customers a 50% discount, that would only cost Echostar $600M, wonder what we do with the rest of the auto makers?
 
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$.
 
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)?
 
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.
 
Sirius XM Prepares for Possible Bankruptcy

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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.

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Mike Segar/Reuters
Mel Karmazin, chief of Sirius XM

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Times Topics: Sirius XM Radio Inc.
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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.
 
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.....)
 
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