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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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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.


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