Sirius/XM Radio

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VTSeaRay

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Feb 19, 2008
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A friend of mine who uses Sirius/XM heavily said this weekend, they're(sirius/XM) having trouble and will probably go under shortly. Has anyone else heard this? I'm wondering if I should renew my subscription on my boat this spring or not? (I'm wondering it even if the rumor's not true, since I only listened to it once in a while last summer, and usually plug my ipod in, but it was fun for a change of pace now and then)

-VtSeaRay
 
Here's some news today from CNBC.

Satellite mogul Charles Ergen made an unsolicited offer late last year to take control of Sirius XM Radio Inc. [SIRI 0.12 -0.01 (-7.85%) ], and was rebuffed, the Wall Street Journal said, citing people familiar with the situation.

Ergen proposed for one of his satellite companies -- EchoStar Corp. [SATS 16.60 -0.04 (-0.24%) ] or Dish Network Corp. [DISH 13.94 0.37 (+2.73%) ] -- to inject enough capital into Sirius for it to meet its debt obligations and avoid a bankruptcy filing, the newspaper cited the people as saying.

Despite the rejection, Ergen has recently reiterated his interest in taking control of Sirius, the paper said.

Even if Ergen succeeds in acquiring control of Sirius, however, it is far from certain that federal regulators, whose approval would be required, would welcome the union of satellite television and radio, the newspaper added.

Sirius XM has nearly $1 billion in debt due this year, prompting many on Wall Street to doubt its future given the sluggish credit market and a steep drop in car sales -- the biggest source of new satellite radio subscribers.

Ergen's move has put Sirius Chief Executive Mel Karmazin in a corner, the Journal said.

In discussions with investors last week, Karmazin said that unless he could raise $175 million, he would be faced with one of two options: having Sirius file for bankruptcy or cutting a deal with Ergen, the paper said. An EchoStar spokesman could not be immediately reached for comment by Reuters. Sirius too could not be immediately reached for comment by Reuters.

http://www.cnbc.com/id/29099599/site/14081545?__source=yahoo|headline|quote|text|&par=yahoo
 
Well, my friend that is the heavy Sirius/XM user that I mentioned about his thoughts of what might happen to them the other day just called me. Seems he got a couple of offers from Sirius in the US Mail today. Apparently, Sirius is trying to raise cash - they're offering to extend his contracts for 2 yrs, if he forks over the $$$ to pay for them now, he saves $48 over the 2 yr contract, because they're going to raise the rates $2/month.

Sirius is trying to raise cash....

I didn't realize it was legal to use the US Mail to run the Nigerian scam. They send you a check(the offer), you cash it, and send them back $200(pay for the 2 yrs up front) to cover their costs, and then you're left holding the bogus check(a bankrupt Sirius).

Interesting. He said he's NOT going to sign up for it, and will continue to let his current contracts run out.
 
I have 4 subcriptions to XM, 2 cars, boat, and home/camper (summer). I got the same email from XM telling me if I don't lock in for 2 years, my current subscrptions are going to increase in March. Too bad, I love XM and never listen to regular radio anymore.
 
Done. Thats what happens when you give Howard 500mill
 
AndersonAcres said:
Sirius XM has nearly $1 billion in debt due this year, prompting many on Wall Street to doubt its future given the sluggish credit market and a steep drop in car sales -- the biggest source of new satellite radio subscribers.

Ergen's move has put Sirius Chief Executive Mel Karmazin in a corner, the Journal said.

In discussions with investors last week, Karmazin said that unless he could raise $175 million, he would be faced with one of two options: having Sirius file for bankruptcy or cutting a deal with Ergen, the paper said. An EchoStar spokesman could not be immediately reached for comment by Reuters. Sirius too could not be immediately reached for comment by Reuters.

http://www.cnbc.com/id/29099599/site/14081545?__source=yahoo|headline|quote|text|&par=yahoo
Click to expand...

promocop said:
Done. Thats what happens when you give Howard 500mill
Click to expand...

They will file for bankruptcy. They don't have much choice. Damned satellites and launch costs are too high. XM also got screwed over because their first set of satellites, built by Boeing, were crap. They failed prematurely due to a well-known problem that Boeing has with power. XM then had to buy and launch replacements from Loral much sooner than expected, which was a huge expense. Sirius/XM isn't going to make if if they don't get their costs under control. They have two major cash expenses. One is the satellite infrastructure. Not just one, but they have two completely separate and independent systems. They need to start converting their subscribers to one technology so that they won't need to maintain two systems. They better start doing that soon so all that all customers are using the same technology before they have to start launching more replacement satellites. I've been saying two satellite system costs are going to kill them since they first started merger talks and have posted on that topic before. The second major cost is, unlike old fashioned terrestrial radio, Sirius/XM pays for every song they play. Don't see any way around that one.

They didn't pay Howard Stupid cash. He got mostly stock, from what I understand. Big joke on him if that's true.

Best regards,
Frank
 
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So, the past couple of weeks I have noticed first announcements on XM (The Blend) which I did not really mind... "Welcome to The Blend, music from the 70's, 80', 90's and today" But the past two weeks, I am hearing commercials... DJ's butting in as close as 5 mins apart telling me about the latest Entertainment scandel or stay tuned to hear about the episode on TV..blah blah blah...

I could have sworn I paid for commercial free radio...

To top it all off, I got a "great offer" By email the other day. Seems my online listening will now cost me due to the HD internet upgrade they are doing. But I have to "upgrade by Mar 10th... Not sure about anyone else, but my little computer speakers are as cheap as you can get and I don't know of many people adding surround sound to them. Besides, it is already digital quality now???

I emailed them telling them I will not renew and I dislike the baited email. I'd rather hook up my IPOD to the radio and not pay the new fee structure...

So am I that anal or do others hear more and more non-music?

XM always provided online for free with the basic service... The Mar 10 deal has an asterisk on it and the fine print says no fee increase if you already paid this years subscription. Therefore if you DO renew early, you get the priveldge of paying more BEFORE your renewal takes effect. Its a great way for them to get around the no fee increase for a year they promised the FCC when they merged.

XM: Quote:
[FONT=Arial, Helvetica, sans-serif]On March 11, 2009, the monthly rate for your discounted subscription will increase from $6.99 per month to $8.99 per month upon renewal.* You can lock in your current special discounted rate of $6.99 by choosing a longer-term plan at www.xmradio.com/lockin - but only if you act quickly.

And if you renew now, you can continue to listen online FREE for the entire length of your subscription. Effective March 11, 2009, the XM Radio Online listening platform will be upgraded to a higher quality digital audio and no longer included as part of a base subscription at no charge. [/FONT]
Talk about a racket!
 
We totally agree. We have already started the switch to Pandora. Since I have an Iphone, it is also free on the iphone which then connects to your car radio via many connection methods, also free on the internet for at work. As long as I have cell reception, it also works on the boat.
 
Howard...all stock? Not true, stock yes, tons and tons of cash as well over 100m in CASH. Read the WSJ from today
 
I was going to get the Raytheon Weather Module...a little on the fence about dropping that sort of coin not knowing if there will be service for it...
 
I'm a little surprised that none of the broadcasting companies (westwood one) or household-name communications companies (CBS, ABC) has made any overtures. I suppose they have their own financial problems but you'd think they'd be interested in getting into the business of satellite radio. Who knows - the FTC would probably block it anyway.

I don't consider hearing entertainment news cut-ins "commercials." They are very brief and sometimes interesting - I could certainly take them or leave them, but I don't let them bother me.

The commercials on the "talk" side are brutal. Just as bad as terrestrial radio in length and number.

I still say they should get rid of all "on-air" personalities. I could do without them and it would save a nice chunk in payroll expense.
 
I been with XM for over 7 years now. Love it. Unfortunately I believe they will be in bankruptcy in 2009 your are correct they have to come up with a big payment in 2009.

I have been investigating the iPhone and there are a lot of free applications to stream music. Pandora is great, Flycast, Shoutcast, FStream will stream over 6500 streams. The issue is that for the 128K streams you need 3G service or you get lots of drop outs. So I find that I will get drop outs in our area as the 3G service goes up and down. I was hoping it would be better.

XM/Sirius just works and is easy and I don't mind the price increase, cost of doing business... I am not in any long term contracts with them and won't be given the economic conditions now... Just going to listen until they turn off the satellites.
 
This is like the big 3 bailout car discussions. "Bankruptcy" does not mean they will cease to exist. Sirius/XM have decent cash flow in their businesses but to get that cash flow, they had to outlay a bunch of money and take on a bunch of debt. Unfortunately, the investment was greater than the current cash flow can support. Chapter 11 will allow them to reorganize/restructure the debt such that the cash flow can maintain the debt load. Airlines have used this trick all the time.

There are people buying up their current secured debt right now in order to be in front of the line to either foreclose on the assets or get preferential treatment when a trustee gets involved. I think EchoStar/Dish is one of them.

This is like a ski resort... The second owner is the one that makes the money.
 
Makes sense. They have (I believe) around 18 million total prescribers... by my math at $12.95/month that's about $2.8 billion --with a "B"-- per year. That's some cash-flow that surely someone would like to get their hands on. Echo Star makes a lot of sense as a buyer. Mel Karmazin is a pretty sharp guy though, he may be able to figure a way out of this while keeping the company independent.

I really don't care who owns it, but I do enjoy the service at home in the car and on the boat (via Direct TV).
 
Local idiot TV news station (WPIX 11) had the story today in their "Business report." Sirius/XM expected to file this week. Echo was mentioned as a suitor.
 
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