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betao
02-12-2009, 08:13 AM
Haven't seen it posted elsewhere, if it has, then delete/flame on

http://www.nytimes.com/2009/02/11/technology/companies/11radio.html?_r=3&ref=technology

Last summer, Mel Karmazin was rattling off his trademark one-liners to talk up the future of Sirius XM Radio, the combined company he ran that had just been blessed by regulators.
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Mike Segar/Reuters

Mel Karmazin, chief of Sirius XM
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Times Topics: Sirius XM Radio Inc.
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David Scull/Bloomberg News

Charles Ergen, EchoStarís chief.

He was planning to cut costs and expand a business that was already a fixture in the lives of millions of Americans. ďForty-three cents a day ó itís not even vending machine coffee,Ē he said at the time, parrying a question about whether the softening economy might hurt subscriptions.

But now Sirius XM, the satellite radio company, has problems with much bigger price tags. It has hired advisers to prepare for a possible bankruptcy filing, people involved in the process said.

That would, of course, be a grim turn of events for the normally upbeat Mr. Karmazin, Sirius XMís chief executive, who had hoped to create a mobile entertainment juggernaut with stars like Howard Stern.

It is unclear how a bankruptcy would affect customers. Service is unlikely to be interrupted, but the company might have to terminate contracts with high-priced talent like Mr. Stern or Martha Stewart.

A bankruptcy would make Sirius XM one of the largest casualties of the credit squeeze. With over $5 billion in assets, it would be the second-largest Chapter 11 filing so far this year, according to Capital IQ. The filing by Smurfit-Stone, with assets of $7 billion, has been the yearís biggest to date.

Sirius XM, which never turned a profit when both companies were independent, is laden with $3.25 billion in debt. Its business model has been dependent, in part, on the ability to roll over its enormous debts ó used to finance sending satellites into space and attract talent like Mr. Stern (who was paid $100 million a year) ó at low rates for the foreseeable future until it could turn a profit.

The companyís success and failure are also tied to the faltering fortunes of the automobile industry, which sells vehicles with its radio technology installed and represented the largest customer base among Sirius XMís 20 million subscribers.

Sirius XM owes about $175 million in debt payments at the end of February that it is unlikely to be able to pay.

Sirius XMís problems could pave the way for a takeover by EchoStar, the TV satellite company, which has bought up Sirius XMís debt.

Mr. Karmazin has been locked in talks with EchoStarís chief executive, Charles W. Ergen, over Sirius XMís options, people involved in the talks said. The men are said not to get along, these people said, and Mr. Karmazin had rebuffed Mr. Ergenís takeover advances before.

Sirius XM hired Joseph A. Bondi of Alvarez & Marsal and Mark J. Thompson, a bankruptcy lawyer with Simpson, Thacher & Bartlett, to help prepare a Chapter 11 filing, these people said.

Documents and analysis are close to completion and a filing could come in days, according to a person familiar with the matter.

The threat of bankruptcy could also be part of a negotiating dance with Mr. Ergen, who could decide to convert his debt into equity instead of demanding payment.

In addition to the $175 million due in February, EchoStar also owns $400 million of Sirius XMís debt due in December. If Sirius XM files for bankruptcy, EchoStar could seek in court to take over the company. Mr. Ergen, however, may be able to negotiate to convert his shares before bankruptcy at an attractive rate and gain control of the company, these people said.

For Mr. Karmazin, the sale or bankruptcy of Sirius XM would be one of his first failures. He founded Infinity Broadcasting, sold it to CBS and later merged the combined companies into Viacom, where he had a notoriously difficult relationship with Sumner M. Redstone, the chairman, before being ousted.

Mr. Karmazin bought two million shares of Sirius XM at $1.37 a share in August. Before that, he had bought 20 million shares at an average price of $5 each. On Tuesday, Sirius closed at 11.4 cents a share.

Since the summer, the companyís prospects have dimmed.

ďIím not trying to paint the rosy picture, because we have challenges connected to our liquidity and certainly our stock price is dreadful,Ē Mr. Karmazin said in December. ďBut, you know, our revenues are growing double digits. Weíre growing subscribers. Weíre not losing subscribers.Ē

A spokeswoman for Mr. Karmazin declined to comment. A spokesman for EchoStar could not be reached.

Mr. Karmazin staked the success of the merger on nearly $400 million in annual cost savings and the potential to gain subscribers through deals with auto companies to put satellite radios into cars.

But satellite radio failed to win over many younger listeners, and competition from other sources slowed subscriber growth.

sydaud
02-12-2009, 08:22 AM
It would not bother me one iota if they got rid of Stern/Stewart/and all their sports contracts. I just like commercial free music and I hope that there isn't any interruption in service---doesn't sound like it'll happen, but I swear, I just can't go back to free radio.

M Sparks
02-12-2009, 08:22 AM
They are courting an investment/takeover from Liberty now.

Mel REALLY hates Charlie. He'll do anything to avoid Charlie becoming his boss.

XM has been completely ruined by this merger. Ron & Fez is the only thing that keeps me subscribing.

luckyface
02-12-2009, 08:24 AM
Honestly, Howard Stern is the only reason I even bother with listening to satellite radio. If he goes away, I am perfectly fine with my iPod in the car.

captncrzy
02-12-2009, 08:34 AM
I'm all for it if the restructuring brings back Boombox.

M Sparks
02-12-2009, 08:59 AM
I'm all for it if the restructuring brings back Boombox.

Can't imagine how bankruptcy would help bring back any channel. If anything, they'll be cutting more.

anti-square
02-12-2009, 09:06 AM
SHIT! They stopped broadcasting altogether!

































No, wait... God I love buffering.

TomAz
02-12-2009, 09:49 AM
My prediction:

- Sirius XM files Chapter 11
- Sirius XM's assets are sold at a discount to someone in India or China
- creditors eat the rest
- India/China owner now has satellites in space that someone else paid for
- new company turns profit
- programming largely unchanged, but when you call tech support they say "hello how may I be of helping you today?"

C DUB YA
02-12-2009, 10:14 AM
other than stern there is nothing driving anybody to sat radio

captncrzy
02-12-2009, 10:57 AM
Can't imagine how bankruptcy would help bring back any channel. If anything, they'll be cutting more.

Bugger.

captncrzy
02-12-2009, 10:57 AM
other than stern there is nothing driving anybody to sat radio

Sports nuts

Young blood
02-12-2009, 11:00 AM
other than stern there is nothing driving anybody to sat radio

Shitty stock advice from garrett222.

TomAz
02-12-2009, 11:32 AM
Sports nuts

Yes, I listen to ESPN and the NFL network fairly regularly on Sirius. Plus games from around the country during the season.

HunterGather
02-12-2009, 11:46 AM
I'm all for it if the restructuring brings back Boombox.

I'm still sad they got rid of this channel :(

TommyboyUNM
02-12-2009, 11:50 AM
Ron & Fez and Opie & Anthony keep me listening for the most part.

lowfront
02-12-2009, 12:41 PM
My prediction:

- Sirius XM files Chapter 11
- Sirius XM's assets are sold at a discount to someone in India or China
- creditors eat the rest
- India/China owner now has satellites in space that someone else paid for
- new company turns profit
- programming largely unchanged, but when you call tech support they say "hello how may I be of helping you today?"

This is exactly whats going to happen, just maybe not an indian or china man

sydaud
02-12-2009, 12:49 PM
- programming largely unchanged, but when you call tech support they say "hello how may I be of helping you today?"


Thank you, sir, for my laugh of the day.

dorkfish
02-12-2009, 01:02 PM
Ron & Fez and Opie & Anthony keep me listening for the most part.
good to hear that budddday

garrett222
02-12-2009, 05:09 PM
Shitty stock advice from garrett222.

tru dat. I bought 1500 shares for a hundred bucks yesterday! a steal. they don't have the Fat Lady music channel on satellite radio yet...so I'm still in.

faxman75
02-12-2009, 05:20 PM
I got it for Stern and I listen to the music, news and nfl games during the season.

garrett222
02-13-2009, 07:08 AM
Shitty stock advice from garrett222.

up as much as 60% this morning. All aboard the gravy train!

ElBlueblazer
02-13-2009, 08:06 AM
BaBabooey

ElBlueblazer
02-13-2009, 08:12 AM
Tatatoothy


Mamamoneky

Young blood
02-13-2009, 01:12 PM
tru dat. I bought 1500 shares for a hundred bucks yesterday! a steal. they don't have the Fat Lady music channel on satellite radio yet...so I'm still in.

You were hyping at 3-4 $ a share.

http://www.bloomberg.com/apps/chart?h=152&w=240&range=1y&type=gp_line&cfg=BQuote.xml&ticks=SIRI%3AUS

garrett222
02-14-2009, 04:59 AM
I was hyping at 75 cents actually.

sydaud
02-14-2009, 05:26 AM
And this mornng on Sirius 33, the brand new Paul McCartney channel :)