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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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Will Liberty Media fix the incompetence?
By AlexWade on 2/17/2009 1:13:05 PM , Rating: 2
I am an ex-XM radio subscriber. I was also an early adopter, buying my first XM adapter less than a month after it launched. The merger was the worst thing to happen. Sirius XM is driving customers away. Here are the blunders:

1) Sirius took all of radio stations similar to the ones they had on Sirius and destroyed them. It didn't matter which was better, Sirius got rid of XM carte blanche. The result: the music selection is worse and you have annoying DJ's as bad as over the air radio. I used to be able to find something worth listening to between 5 stations. Now I go through 10 or more and still can't find something good. Music tastes are subjective, so maybe you like the new stations. I do not. I can live with the lack of quality. I cannot live with the annoying DJ's. JUST PLAY THE MUSIC! That I told the outsourced call center to get rid of the DJ's and I'll be back.

2) Anytime you pay more for the same level of service, it is a price increase. The day before I canceled, I got an e-mail saying that Sirius XM was going to charge $2.95 per month extra for the ability to listen online. I swore that if Sirius XM raised their prices, I was going to cancel. Promise kept. I will not go back, even if they get rid of the DJ's, unless they rescind this fee for all subscribers. I supported the merger, even sent a letter to the FCC through a merger website. In that letter I sent, I told the FCC that if Sirius XM raised their prices, I was leaving.

I left Sirius XM. In a few year, I expect we will use this as a model for how not to do a merger.




RE: Will Liberty Media fix the incompetence?
By cpeter38 on 2/17/2009 3:20:25 PM , Rating: 2
quote:
I cannot live with the annoying DJ's. JUST PLAY THE MUSIC!


We turn on the classical music to pacify our toddler. Unfortunately, the DJs announcement of the next song is typically 3 dBa greater than the music. Why does that matter? Our son wakes up or gets restless. To make matters worse, the same DJs love to hear themselves talk. It is not unusual for them to spend 15-30 seconds discussing their great knowledge of the composer or performer.

Sirius, here is some free (but very valuable advice):
Nobody wants to hear the DJs for more than 5 seconds between songs/music!!


Whatever they do say should be matched to the music (volume, tone, & attitude)!!

They have 2 months to fix it - I cannot see myself paying any additional money if I am just going to be continually annoyed!


By psychobriggsy on 2/17/2009 3:53:04 PM , Rating: 2
Naxos classical CDs are dirt cheap.

Screw the radio. Rip the classical onto your home server and install a cheap wireless music device in the nursery.

And yes, screw the subscription. I wouldn't pay to listen to DJs.


RE: Will Liberty Media fix the incompetence?
By EglsFly on 2/17/2009 4:48:56 PM , Rating: 2
quote:
I cannot live with the annoying DJ's.
If all you want is just music, listen to your MP3 player!
I have no issue with the DJ's, having them hop on in between songs and maybe once in a while providing some casual input on a tour or band info is good stuff.


By Oregonian2 on 2/17/2009 10:22:50 PM , Rating: 2
I think that's what they say they're going to do as part of their canceling their satellite radio service (because of the DJ's).


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