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Print 31 comment(s) - last by bldckstark.. on Feb 18 at 12:33 PM

Liberty Media saves Sirius XM from Echostar

Sirius XM, the largest provider of satellite radio, has struggled mightily in the months since the company was created by the merger of Sirius and XM.  On the verge of bankruptcy, Sirius has been saved for the time being by Liberty Media, which has agreed to loan the company a large amount of money to prevent it from being taken over by Charles Ergen's EchoStar or forced to declare bankruptcy.

The deal loans Sirius XM $530M USD, enough to pay off its debts to EchoStar, and in exchange Liberty Media will have a 40 percent stake in the company via 12.5 million shares of preferred stock.  The move will dilute the stock of current shareholders, but given the fact that its low value was largely due to the uncertainty surrounding the company, this is welcome news to many.

Sirius XM will have Liberty Media's chief executive John Malone, who brokered the deal with Sirius XM chief Mel Karmazin, on its board of directors.  The company also expects to add Liberty Media's Greg Maffei to its board.

The loans issued to Sirius XM will come at a 15 percent interest rate.  The deal is a significant one as it means the nation's top satellite TV provider (DirecTV, a subsidiary of Liberty Media) and its top satellite radio provider, Sirius XM, will be closely tied. 

No word has been announced if the companies will plan joint packages or marketing, but given their new ties, such promotions seem likely.



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RE: Finally!
By zombiexl on 2/17/2009 10:53:38 AM , Rating: 3
What are the caps on unemployement in the states that would be affected. I'm pretty sure all states have a weekly (or bi-weekly) max. Also you recieve only a portion of what you would if you were working thorugh unemployment.
I think that your 500,000,000/mo is over inflated as well as the 100k jobs. At 100k that would be 5k/mo (60k per year) per unemployed person. I'm pretty sure most unemoployment max's are below that and closer to 3-4k.

If GM failed other companies would need more suppliers for increased demand for their products. Also people with GM vehicles would still need parts when their cars needed repairs. Companies would need more workers to fill the demand for vehicles. Just becuase GM fails doesnt mean everyone who buys GM will stop buying or repairing cars.

You are using the numbers the UAW pushed out there to scare america into giving the car companies the money to keep overpaying their employees. Of course that's so those same employee's can keep paying their union dues. Most americans werent stupid enough to believe those numbers and didnt want any bailout. Good old W went ahead and turned his back on those who voted for him (much like the rest of his second term) and the wishes of the american people in general.

The UAW cares about the UAW, just like any union. If they have to save a job here and there to make it look like they are doing something they will. If the Big 3 failed the UAW would crumble and they arent going to let that happen. If any of the big 3 filed bankruptcy they could boot the union out and the UAW would be hurting.


RE: Finally!
By bldckstark on 2/17/2009 12:27:04 PM , Rating: 2
Filing bankruptcy does not automatically end the UAW contract. That remains up to the judge.

The UAW workers make on average $3 more per hour than the import workers. It is the retiree benefits that are killing the big 3.

If ANY of the large automakers declare bankruptcy, all of their suppliers would almost immediately be out of business**. Most suppliers sell parts to several auto makers, so all of the suppliers customers would also be shut down. For example, if GM fails then Ford, Chrysler, and probably Toyota would also fail. That equates to about 4M -6M jobs. 4M more people out of jobs would cause a depression the likes of which this country has not seen since the 1930's, and very well could cause the failure of the USA. That is why the government is bailing them out.

Most people don't understand this, and that is why they are against the bailout.

**About 18% of an automotive supplier's cash is tied up at any one time with each of it's customers. If one of them files bankruptcy, the suppliers lose 18% of their cash as it is tied up in legal issues, or they get a few cents on the dollar returned. That is too large a hit for pretty much any business to remain afloat.


RE: Finally!
By omnicronx on 2/17/2009 12:32:00 PM , Rating: 2
quote:
The UAW workers make on average $3 more per hour than the import workers. It is the retiree benefits that are killing the big 3.
This is without the amazing health benefit packages they receive. When this is weighed in, they are making almost at least 1/3 more than import workers.


RE: Finally!
By bldckstark on 2/17/2009 12:49:14 PM , Rating: 2
Nope, not true. The import workers also receive a similar health package, along with other beneifits such as on site child care, and preventive medical treatments on site as well.


RE: Finally!
By austinag on 2/17/2009 2:32:38 PM , Rating: 2
Here is a good article on the subject:
http://factcheckcms.bootnetworks.com/articles/arti...

The conclusion of which, is that the cost, (not the wage) of a Domestic UAW workers is about 15 dollars an hour higher the a transplant manufacturers's workers because of retiree benefits costs.


RE: Finally!
By RamarC on 2/17/2009 1:26:10 PM , Rating: 2
it's simple math. unemployment benefits are about $600 a month. 100,000 beneficiaries results in at least 500x100,000 = 500,000,000. the number of employees affected by a shutdown of gm are well documented. (the estimates were published when the auto execs begged for the bailout before congress.)

and union contracts, just like any financial contract, are terminated/nullified by bankruptcy (depending on the type). any contract holder (uaw included) becomes a creditor and the presiding judge will determine who gets paid and how much. and if there is no cash (and gm is almost broke), nobody's getting paid until a liquidation takes place.


RE: Finally!
By psychobriggsy on 2/17/2009 3:45:22 PM , Rating: 2
$600 * 100,000 = $60,000,000.

Let's factor in the fact that these 100,000 directly or indirectly keep another 50,000 in work by buying things. That's still only $90,000,000 a month.

Now I'm sure they'd get more than $600 a month, if they normally earn $3000+ a month (what do these people earn? It's a trainable assembly job so it's not that advanced, can't be more than $40k a year - maybe someone in the US who knows can say). Or maybe other benefits kick in on top.


RE: Finally!
By Oregonian2 on 2/17/2009 10:14:27 PM , Rating: 2
In Oregon, the maximum for unemployment benefits is under $500/week. Unfortunately I'm speaking from experience. And it lasts for a maximum of 26 weeks.


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