Sirius XM Prepares Bankruptcy Filing

[navychop]

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.

I am. Charlie all the way!

And DJ Rob hit the nail on the head.

 

[DJ Rob]

The stock isn't the same as cash. But let's go ahead and use the highest compensation number for Howard in your post Rad - $700 million over 5 years. That's still only 900,000 subs he needed to get to sign up. He earned a bonus for doing more than that. According to the old arbitrons when he was on terrestrial radio, his audience is mostly male with a more disposable income than most people. And remember, that doesn't include the thousands of dollars billed each day by Sirius from the commercials that run on his channels...

 

[Sparkman]

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.

XM has always had Baseball, Sirius never did. But they did spend alot of $$ on contracts.

 

[drdroo]

The problem is that Sirius and XM competed against each other for contracts for content... The dynamic has changed now because there is no competition. If they file for bankruptcy, they should be able to restructure these deals in a big way, and they have no-one to compete against in the same sector, so they should be able to have much better deals.

The issue isn't competition in general, it's the fact that competition between these two companies resulted in bad deals to maintain relevance in the sector.

 

[mister_jerry]

I just ran accross this on the New York Times web site.


Sirius XM Prepares Bankruptcy Filing

By ZACHERY KOUWE
Published: February 10, 2009
Sirius XM Satellite Radio has been working with advisers to prepare for a possible bankruptcy filing in a move that could put pressure on the satellite company EchoStar, which owns a substantial amount of the company’s debt.
Skip to next paragraph Related

Times Topics: Sirius XM Radio Inc.




Sirius has been working with the restructuring expert Joseph A. Bondi of Alvarez & Marsal and the bankruptcy lawyer Mark Thompson of Simpson, Thatcher & Bartlett to help prepare a Chapter 11 filing, people close to the company said. The documents and analysis are close to being completed and a filing could come within days, according to a person familiar with the matter.
Sirius, whose radio stars include the popular shock jock Howard Stern, has also been working with the investment bank Evercore Partners.
Charles Ergen, who controls a satellite-television empire including the Dish Network Corporation and EchoStar, recently acquired the majority of a $300 million tranche of Sirius debt that matures next Tuesday.
Since the news about the debt purchase has emerged, questions have surfaced over whether Mr. Ergen will make a bid to purchase Sirius. The threat of a possible bankruptcy filing could force Mr. Ergen to make a formal offer for the company now if he doesn’t want to go through an auction in bankruptcy court.
It could also compel Mr. Ergen to agree to convert his debt into an ownership stake in Sirius at a higher price than he originally considered.

As an SiriusXM subscriber, I've been very disappointed in how the whole "merger" has turned out as far as the channel lineup is concerned. I've listened to both networks lineup pre-merger and what they have now. I liked the XM lineup better, especially how they butchered the former Comedy XL (150) now Rawdog.

Also got an e-mail the other day stating that their rates will increase in March by a couple of bucks per receiver. In this economy, two dollars matters to me, and I don't wish to see my money go to a grossly overpaid Howard Stern. I see the end being near for me as far as being a satellite radio customer/listener

 

[HD MM]

For those of you who listen to Howard, this topic of Charlie possibly buying Sirius/XM came up on his show yesterday. Howard said he knew nothing about it and there were a lot of crazy rumors going around lately. Anyways, he put in a call to Charlie, live on the show, but couldn't get through.

 

[Scott Greczkowski]

Take a listen to this weeks SatelliteGuys Podcast. I talk alot and give some good information which has not been reported elsewhere. ANd so far my info has been 100% spot on.

I should also note that the podcast was recorded BEFORE Muzak filed for Bankruptcy yesterday which gives what I said even more credibility.

http://www.satelliteguys.us/satelliteguys-podcast/164549-volume-three-show-six.html#post1700023

 

[Ramy]

What happens to my SIRI stock if they file for bankruptcy?

 

[john green]

Take a listen to this weeks SatelliteGuys Podcast. I talk alot and give some good information which has not been reported elsewhere. ANd so far my info has been 10% spot on.

I should also note that the podcast was recorded BEFORE Muzak filed for Bankruptcy yesterday which gives what I said even more credibility.

http://www.satelliteguys.us/satelliteguys-podcast/164549-volume-three-show-six.html#post1700023

Scott, Only 10% spot on ?

 

[jhamps10]

What happens to my SIRI stock if they file for bankruptcy?

who cares it's practically worthless right now anyway. down 35% before the bell. down to something like 9 cents a share or something.

 

[Tampa8]

Everything I have seen in the many many years of being a Dishnetwork subscriber (almost from their start) and being on the forums back to those days, I can tell you Charlie is one step ahead of them. Just two of the big things - he announced Dish would carry local channels, when DBS was not doing so at the time and most people said what a big mistake that would be. Most people would not have DBS as their provider if locals or at least networks were not available unless it was the only choice to watch TV.

Then when it looked like distant channels would be turned off and Dish might lose customers who do not have locals, (and Direct TV had started switch campaign) *POOF* Charlie waves his magic wand and leases space to a company who provides that service. Withstood court challenges, and the rest is history......
I think Charlie knew they could go into bankruptcy when he bought the stock, I say he has a plan.

 

[jhamps10]

Everything I have seen in the many many years of being a Dishnetwork subscriber (almost from their start) and being on the forums back to those days, I can tell you Charlie is one step ahead of them. Just two of the big things - he announced Dish would carry local channels, when DBS was not doing so at the time and most people said what a big mistake that would be. Most people would not have DBS as their provider if locals or at least networks were not available unless it was the only choice to watch TV.

Then when it looked like distant channels would be turned off and Dish might lose customers who do not have locals, (and Direct TV had started switch campaign) *POOF* Charlie waves his magic wand and leases space to a company who provides that service. Withstood court challenges, and the rest is history......
I think Charlie knew they could go into bankruptcy when he bought the stock, I say he has a plan.

I think he does too. something tells me that Scott's thinking in the podcast is exactly right that Charlie wants control of Sirius/XM and I for one would think that could be a GREAT thing for satellite radio. quite frankly Charlie might just save satellite radio IMO.

 

[rad]

The stock isn't the same as cash.

It is if once Howard got that stock he turned around and cashed it in, that money came from somewhere didn't it.

 

[silvanthalas]

One group that should probably be concerned about with a Charlie takeover of Sirius XM are sports fans.

Between Sirius and XM, I believe all the major sports were covered for satellite radio

But which of the two satellite TV companies doesn't have NFL Sunday Ticket? Which one doesn't have MLB Network?

Now imagine a Echostar-owned Sirius XM trying to negotiate new contracts with NFL and MLB when they already have problems getting their stuff on Dish Network...

 

[jadiff]

It is if once Howard got that stock he turned around and cashed it in, that money came from somewhere didn't it.

He most likely was not allowed to do that. His contract probably said that the stock may not be sold without following very strict guidelines. His $250 million of stock is now worth about $600k.

 

[rad]

He most likely was not allowed to do that. His contract probably said that the stock may not be sold without following very strict guidelines. His $250 million of stock is now worth about $600k.

Don't know if he had to keep some of it or not, but he did sell,
Howard Stern Moves to Sell $200M in Sirius Stock

"Just three days after starting his new job at Sirius Satellite Radio Inc., shock jock Howard Stern is now able to sell the roughly $200 million in Sirius stock that he received as part of his five-year deal with the company.

Sirius' contract with Stern runs through 2010, but the company disclosed last week that it was giving Stern and his agent 34.4 million shares of stock right away because it had already reached certain undisclosed targets for subscriber growth under the deal it signed with Stern in late 2004.

On Wednesday, the company made another regulatory filing saying that entities controlled by Stern and his agent, Don Buchwald, would receive the proceeds of the sale of the shares, which could occur at any time. It's not yet clear when or how much they will sell, and Buchwald did not return a call seeking comment.

Nearly all of the stock is going to Stern, but Buchwald also received a substantial chunk: 3.125 million shares, worth nearly $20 million at current share prices, or 10 percent of the 31.25 million shares that Stern received, which are now worth just under $200 million.

Sirius originally said its deal with the shock jock was worth about $100 million per year in cash and stock over the five years of the contract, or $500 million, including costs for producing and marketing the show

But thanks to the nearly doubling of Sirius' shares since then, the value of the stock portion of the contract went from about $110 million to more than $200 million, making the total deal now worth more than $600 million at current stock prices."

 

[ronswanberg]

No sympathy

Poor customer service. Try to cancel your subscription. They make it nearly impossible. You can't cancel on-line. When I called in to cancel, I was transferred to someone else and put on a LONG hold. My call was then cut off. (This happened twice.) The rep. would not take "no" for an answer. The whole experience was very frustrating (and time consuming). I would never do business again with a company that operates in this way.

 

[cjwct]

Very interesting news on Howard today:

First, a bankruptcy idea was floated out by Sirius/XM to not just push Charlie's hand, but the banks as well in terms of lending. SXM wants banks to realize that it will be easier to deal with them without the interjection of a judge for every monetary transaction if they have to file bankruptcy. Secondly, the bankruptcy will not result in closing of shop, but a restructuring where now those big contracts (i.e. Oprah, Mike Russo, etc.) can be dissolved and re-cooperate money. Bottom line: let's wait and see!

 

[teknophyle]

Liberty Media

This just in! got an e-mail from allaccess saying that: The NEW YORK TIMES' DEALBOOK blog is reporting that SIRIUS XM RADIO is in talks with LIBERTY MEDIA about a possible deal to head off Chapter 11 bankruptcy and a possible takeover by ECHOSTAR.

ANY THOUGHTS FROM EVERYONE ON THIS POSIBLE DEAL?

 

[teknophyle]

As an SiriusXM subscriber, I've been very disappointed in how the whole "merger" has turned out as far as the channel lineup is concerned. I've listened to both networks lineup pre-merger and what they have now. I liked the XM lineup better, especially how they butchered the former Comedy XL (150) now Rawdog.

Also got an e-mail the other day stating that their rates will increase in March by a couple of bucks per receiver. In this economy, two dollars matters to me, and I don't wish to see my money go to a grossly overpaid Howard Stern. I see the end being near for me as far as being a satellite radio customer/listener

As a member of the broadcasting community for 24 years I can say not everyone hates Howard Stern. I have Sirius and love the music compared to terristial radio. Since I have has sat radio I have NOT listened to terrisital radio in about two years. I can say after working for Clear Channel and other big radio companies Sat radio is the way to go. If you don't like Howard Stern then change the channel. Remember he is the only man in broadcasting that told managment and the federal government off and WON!