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View Full Version : Sirius XM Prepares Bankruptcy Filing. Update:Gets Lifeline From Liberty Media


MacNut
Feb 10, 2009, 04:02 PM
Sirius XM Satellite Radio has been working with advisers to prepare for a possible bankruptcy filing in a move that could put pressure on satellite company EchoStar, which owns a substantial amount of the company’s debt.

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, peole close to the company said. The documents and analysis are close to being completed and a filing could come within days, according to a source familiar with the matter.

Sirius has also been working with 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.http://www.nytimes.com/2009/02/11/technology/companies/11radio.html?ref=technology

Drumjim85
Feb 10, 2009, 04:04 PM
not surprising, they've posted a loss every year.

GSMiller
Feb 10, 2009, 06:30 PM
Well I'm not the least bit surprised. What did they expect buying out XM when they both posted a loss every year? No worries, maybe the US government will bail them out :rolleyes:

obeygiant
Feb 10, 2009, 09:57 PM
should I sell my stock now? :(

Drumjim85
Feb 10, 2009, 10:21 PM
should I sell my stock now? :(

you never should have bought your stock

obeygiant
Feb 10, 2009, 10:34 PM
you never should have bought your stock

yeah, i think i bought like 5 share a couple years ago at about 2 dollars. worth nothing now... *shrugs*

MacNut
Feb 10, 2009, 10:41 PM
The company would probably be taken private.

Drumjim85
Feb 10, 2009, 11:06 PM
The company would probably be taken private.

and still fail...

MacNut
Feb 10, 2009, 11:09 PM
I don't see the company just disappearing, it has a lot of assets, it just needs to be run better.

Abstract
Feb 11, 2009, 12:19 AM
XM was supposedly very good before it was bought by Sirius.


To be honest, I think now is the absolute best time for something like Sirius to enter the market. It's an option now in so many cars, and since the turn-over rate for cars is rather long (i.e. many years), is it any wonder that digital radio hasn't caught on? My step-dad just bought a car with XM radio, got the 3 month free subscription, and was thinking about subscribing.

It's no more or less crazy than signing up for hundreds of cable stations. My step-dad travels 1.5 to 2 hours a day by car, and this will make it more enjoyable. I also like SiriuXM (I think that's the name), which is an indie music station. If I get a car in the future, I'd make sure to get the XM/Sirius option.

It's so funny how they're now going bankrupt when I really think they're about to break out and finally make a profit.

todd2000
Feb 11, 2009, 12:25 AM
They better not disappear, I love my Sirius! I've been a subscriber since 2003. I doubt they will just drop off the face of the earth, it is a good service, and there really isn't anything like it out there, unless you want to listen to crappy FM. Perhaps Dish Network/EchoStar will buy them out, I just hope it doesn't screw with my favorite channels. :)

SactoGuy18
Feb 11, 2009, 06:24 AM
I think EchoStar will just absorb them and it will be rebranded EchoStar Satellite Radio. It's still a very viable service, especially since it offers music that the terrestrial radio stations completely miss and the fact it's still the best source for listening to almost any MLB and NFL broadcast in-season.

numbersyx
Feb 11, 2009, 06:31 AM
The problem was that there wasn't the room in the market for two satellite players. They realised this but the Govt. bureaucracy delayed the merger for reasons I still don't understand and for a period of time that was damaging to both companies.

Have no doubt SiriusXM will survive and actually grow now that this is out of the way. The bankruptcy filing is as much of a tactical manoeuvre as anything else...

todd2000
Feb 11, 2009, 12:13 PM
The problem was that there wasn't the room in the market for two satellite players. They realised this but the Govt. bureaucracy delayed the merger for reasons I still don't understand and for a period of time that was damaging to both companies.

Have no doubt SiriusXM will survive and actually grow now that this is out of the way. The bankruptcy filing is as much of a tactical manoeuvre as anything else...

I agree. It was a new service, and there just wasn't enough demand to support two companies. Hopefully the merger will pay off in the long run, it has only been a few months, these things don't turn around overnight. Just because they file bankruptcy it doesn't mean they are going to disappear tomorrow. We shall see what happens, but I have faith. :)

MooneyFlyer
Feb 11, 2009, 01:05 PM
I agree. It was a new service, and there just wasn't enough demand to support two companies. Hopefully the merger will pay off in the long run, it has only been a few months, these things don't turn around overnight. Just because they file bankruptcy it doesn't mean they are going to disappear tomorrow. We shall see what happens, but I have faith. :)

Yep, this is just a tactic to get the Echostar people that own a lot of the debt worried. Also, if they did go to bankruptcy they could renegotiate their debt and contracts under the laws.

Unfortunately, I still own too much of this stock because I'm stupid and believe in the product -- but it's going to be a substantial loss.

freediverdude
Feb 11, 2009, 01:46 PM
One thing starting to hurt them, is that a lot of people who have iPhones or other smartphones- with more options- are starting to move away from satellite radio after subscribing for several years. Technology is starting to move past the "pay for straight up satellite radio" phase.

I know, for example, now that I have an iPhone, there are many other options, almost all free as in $0. Podcasts that stream to the car over cellular, Pandora radio, of course the built-in iPod, Last.FM......the list goes on. I just cannot justify paying for Sirius any longer, and this is what I'm hearing from others too.

There will always be a niche market for satellite, for people who don't have a cell phone with these options, but I don't think it's going to be nearly as big as they hoped.

Dagless
Feb 11, 2009, 03:22 PM
As a Brit who only uses DAB I'm quite surprised to hear people pay extra for optional radio alone.
That said I know nothing of the radio infrastructure of the US.

MacNut
Feb 11, 2009, 03:28 PM
What is DAB?

Satellite radio is coast to coast, if you listen to traditional radio you only get one station for about 100 miles. The signal is not always as strong and you have to deal with commercials. Satellite is pay radio, full digital. No commercials and a better selection of programing.

neoserver
Feb 11, 2009, 03:36 PM
I love my Sirius.. The ads on regular radio just piss me off far too much, and since we can't get things like Pandora here in Canada (to my knowledge anyway) its the next best thing. I just hope no big changes come out of this...

Satellite radio is coast to coast, if you listen to traditional radio you only get one station for about 100 miles. The signal is not always as strong and you have to deal with commercials. Satellite is pay radio, full digital. No commercials and a better selection of programing.

This is what I enjoy so much. I can drive to BC from Alberta without having to go hunting for a new station and did I mention I love no ads?

Abstract
Feb 11, 2009, 03:43 PM
Well that, and they have specialty stations that won't play the same songs as you do on your iPod. They'll also play new songs you've never heard of, and the artist and title of the song show up on the car's stereo display. That extra bit of information they provide is also very nice.

MooneyFlyer
Feb 11, 2009, 04:27 PM
Well that, and they have specialty stations that won't play the same songs as you do on your iPod. They'll also play new songs you've never heard of, and the artist and title of the song show up on the car's stereo display. That extra bit of information they provide is also very nice.

Yeah, I'm mostly in it for the unique content. I spend my time with O&A, CNBC, and baseball during long drives on Friday nights...

SactoGuy18
Feb 11, 2009, 06:42 PM
Until we have very reliable 3G cellular service, why would you want to have streaming Internet radio to your cellphone? The sound quality is not really that great, and given the quality of current cell service you'll will end up with a lot of dropouts.

MacNut
Feb 11, 2009, 06:44 PM
And how will you listen in the car?

Cell phones are horrible with battery life, and the plans are too expensive.

Cheaper to spend 15 a month vs 90.

Dagless
Feb 11, 2009, 07:13 PM
What is DAB?

Satellite radio is coast to coast, if you listen to traditional radio you only get one station for about 100 miles. The signal is not always as strong and you have to deal with commercials. Satellite is pay radio, full digital. No commercials and a better selection of programing.

Ah that doesn't sound too bad then. It's completely different in the UK as you can imagine. There's a group of channels that are the same throughout the island and also local stations.
DAB is just digital quality radio. Effectively just an MP3 stream.

rdowns
Feb 11, 2009, 07:20 PM
They'll also play new songs you've never heard of, and the artist and title of the song show up on the car's stereo display. That extra bit of information they provide is also very nice.

My car's deck can save a 10 second snip of songs you like as well as artist and title info for later purchase.

MacNut
Feb 11, 2009, 07:20 PM
Ah that doesn't sound too bad then. It's completely different in the UK as you can imagine. There's a group of channels that are the same throughout the island and also local stations.
DAB is just digital quality radio. Effectively just an MP3 stream.
In the US we have radio markets. about 250 in the country, each market has about 10-30 stations. They get a broadcasting power of about 75 miles. When you reach the end of the market you get bleed through between stations.

We have companies that own a bunch of local stations all over the country and they tend to consolidate programing. You can hear a lot of syndicated shows all over so you do get overlap.

This is the list of radio markets. (http://en.wikipedia.org/wiki/List_of_United_States_radio_markets)

EricNau
Feb 11, 2009, 07:30 PM
. . . They'll also play new songs you've never heard of, and the artist and title of the song show up on the car's stereo display. That extra bit of information they provide is also very nice.
The same can be done over traditional FM radio.

MooneyFlyer
Feb 11, 2009, 08:32 PM
Well, now the news is saying that SIRI is in talks with Liberty (http://www.marketwatch.com/news/story/sirius-xm-radio-talks-liberty/story.aspx?guid={F1647A79-CD51-41F5-BF03-B911EF4C1EC0}&siteid=yhoof).
Maybe I'll be glad a bought a few shares today... but I doubt it.

Abstract
Feb 12, 2009, 01:03 AM
My car's deck can save a 10 second snip of songs you like as well as artist and title info for later purchase.

Spoiled Acura owners. ;)

SpaceKitty
Feb 12, 2009, 01:14 AM
I bought my 09 Chevy in September and it came with XM. It's all I listen to. I hope they survive.

hexonxonx
Feb 12, 2009, 07:02 AM
Sirius XM is hoping DirecTV may want to merge:

http://www.necn.com/Boston/Business/2009/02/12/Sirius-talking-Direct-TV/1234439114.html

waffle911
Feb 12, 2009, 11:58 PM
And how will you listen in the car?
Cell phones are horrible with battery life, and the plans are too expensive.
Cheaper to spend 15 a month vs 90.
I presume you would listen to it in the car via a connector, like an iPod connector, which would also charge it. For the sake of being universal, there could be a set standard using USB that would allow all USB-enabled phones that support streaming content to act as a radio receiver, which the actual radio head unit could control. Or, the connection could just be bluetooth and you would use a regular 12V adapter for your phone in your car... as you probably should anyway. Or maybe wireless charging will evolve enough to become useful in the near future.
Also... if you are already paying for unlimited data, you might as well use it instead of paying an additional $15/mo. for an additional/superfluous service which could be handled by your existing cellular device.
Granted, cellular technology still has a ways to go before it is ready to cope with reliable streaming HD radio. Maybe by the time they roll out with 4G or 4.5G, the infrastructure will be ready. By then, it will also be much cheaper. Actual voice services would probably be handled over the internet as well.

Koodauw
Feb 13, 2009, 12:13 AM
I am a huge fan of Satellite radio. I hope it makes it through. Although I did like it better when it was just XM.

yg17
Feb 13, 2009, 06:52 AM
Ah that doesn't sound too bad then. It's completely different in the UK as you can imagine. There's a group of channels that are the same throughout the island and also local stations.
DAB is just digital quality radio. Effectively just an MP3 stream.

We have something like that, called HD Radio, which is free, but the stations aren't the same cross country. Much like traditional FM radio, the range is about 100 miles or so from the transmitter.

Sirius uses satellites that cover pretty much all of North America. I've been a subscriber for about 5 years now and I love Sirius. It's great for the morning commute or when you're taking a road trip across the country

MacNut
Feb 17, 2009, 05:00 PM
CHICAGO (Dow Jones) - Shares of Sirius XM Satellite Radio as much as doubled Tuesday morning on news that John Malone's Liberty Media has agreed to invest a total of $530 million in the the beleaguered radio company, allowing it to avoid a Chapter 11 bankruptcy filing.

Sirius XM (SIRI) shares were up 7 cents, or 71%, at 18 cents, in mid-morning trading.

For Malone, who is expected to take a seat on Sirius XM's board of directors, the deal has the added benefit of slamming the door on the plans of rival Charlie Ergen, chairman of EchoStar (SATSV) and Dish Network (DISH), who had also been in negotiations with the satellite radio provider. Malone and Ergen have been butting heads for many years, going back to the 1990s when Malone ran Tele-Communications Inc.; TCI was the biggest U.S. cable provider at the time.

Under the first phase of the transaction, Liberty (LCAPA)(LMDIA) will loan Sirius XM $280 million -- $250 million of which will be funded on Tuesday. Sirius XM will use some of the proceeds of that loan to pay $171.6 million of the $175 million in 2 1/2% convertible notes that are due at the end of business Tuesday.

Liberty's loan to Sirius XM will bear interest at a rate of 15%, and will be due in December 2012. It will be secured by the assets that secure Sirius XM's existing credit agreement.

In the second phase of the deal, Liberty will loan another $150 million to XM Satellite Radio, Sirius XM's wholly-owned subsidiary. Liberty has also agreed to offer to buy up to $100 million of the loans outstanding under XM's existing debt agreements.

Once both phases are completed, Sirius XM will issue Liberty 12.5 million shares of preferred stock, which Liberty can convert into 40% of the company's common stock. Liberty Chairman John Malone and Chief Executive John Maffei would then join Sirius XM's board of directors.http://money.cnn.com/news/newsfeeds/articles/djf500/200902171227DOWJONESDJONLINE000571_FORTUNE5.htm

rhett7660
Feb 17, 2009, 10:46 PM
Well I'm not the least bit surprised. What did they expect buying out XM when they both posted a loss every year? No worries, maybe the US government will bail them out :rolleyes:

Imagine that..... Wonder what Howard Stern is saying about this! :)