Bridge loan could save Sirius XM from Ergen’s grasp
This past week we gave you a brief glimpse into the nightmare that Sirius XM’s business has become and since then things have basically been a cluster… err, mess. Sirius did take a big step in restructuring some of its future debts – $172.5 million that was due in December is now due in June 2011, a move that cost the company 60 million shares of stock. Forget the fact that Sirius XM has $227.5 million of December debt remaining, it also still has $175 million that comes due to Dr. Claw Charlie Ergen and EchoStar this Tuesday and another $350 million due in May. For the time being, the only thing standing between Sirius XM and bankruptcy is Ergen’s willingness to take control of the company, a fate Sirius XM seems to adamantly oppose. But wait! What’s that? A hero emerges to save the day? John Malone and his company Liberty Media are rumored to be in negotiations with Sirius XM at this very moment and may gobble up a healthy chunk of the satellite radio provider’s debt in order to stave off bankruptcy filings or worse yet from the looks of things, Ergen. A quick look at Sirius XM’s near-future debt calendar:
- $175 million due this Tuesday (to EchoStar)
- $350 million due in May (to JPMorgan Chase and UBS AB, among others)
- $227.5 million due in December
- $172.5 million due in June 2011
That’s right folks, a shade under a billion. To make matters slightly worse, the aforementioned shift of $172.5 million that excited investors on Friday is contingent upon Sirius XM paying Ergen on Tuesday. If it doesn’t come up with the dough, no deal. In the end, Tuesday is basically D-Day for the struggling company and either Liberty or a mysterious third-party must swoop in and save the day. In either of those cases however, Sirius XM is merely looking at a band-aid until May when it will have to come up with another $350 million. We hope Mel and the gang have channel 35 programmed as a favorite – they’re going to need it.
[Via SAI]
Ahhhh wtf happened to this company? Is there a profit margin? Like does this company stay afloat?
Nice job rick.
You made it through the report without slandering Stern.
You just may grow to be a competent reporter someday.
Long time customer and lover of XM. The day the new prices affect, Im gone.
Let em burn.
Lol^
Business criticism from a tech blog writer. I wonder how Mel made it through life without him.
Where exactly do you see any criticism?
Whatever, Sirius XM is in deep shit. They have two satellite TV companies fighting over the mess that it they’re current business. They need to what other satellite companies like Iridium did – chapter 11, form a new company to scoop up the assets for chump change, start anew. Ahh, what a system.
Should the government bail out siriusxm since it was terrestrial radio and the FCC dragging their feet in what became the longest merger in history and driving the stock into the toilet?
Ditto what pHug said.
Well if you are thinking about getting rid of xm/sirius and you don’t want the run around with their customer retention dept. Make sure you tell them that you are MOVING out side of their service area (europe, asia or any where out side of North America). That way they are unable to hound you to death about not dropping or call every month to ask if you want to sign up again.
I dislike Stern, I don’t find him particularly entertaining. Back in the late 90’s he was funny – until he turned into a whining, political and just plain annoying.
Would EchoStar ownership be so bad? As long as I have service, prices don’t skyrocket and the stations don’t start putting 40 minutes of commercials and product endorsements for 5 minutes of music I couldn’t care less who is running it.
I want commercial free music in my car, period.
@MadMike who said: “I want commercial free music in my car, period”
As do I, but I have a sneaky feeling that under Ergen, the service will become a self-promoting machine with its own ads always in your face. May not be as bad as having to listen to ads for Billy-Joe-Bob’s Plumbing Services, but it’s not much better either.
I don’t have xm or sirius but what I do have is sprint radio which I use often and I -think- it is a partnership with siriusxm so as long as sprint keeps the music flowing I don’t care who the provider is
Pandora anyone?
Unlimited data + Shoutcast streaming ftw.