Hey thanks so much for this, for II'm a subscriber to xm first then they merged as wel all know. thanks againAt 08:22 PM 2/11/2009, you wrote:
>>The New York Times >>February 11, 2009 Wednesday >>Late Edition - Final >>Section B; Column 0; Business/Financial Desk; Pg. 1 >>780 words >>Satellite Radio Company Sirius XM Prepares for Possible Bankruptcy >>By ANDREW ROSS SORKIN and ZACHERY KOUWE >> >>Last summer, Mel Karmazin was rattling off his trademark one-liners to talk >>up the future of SiriusXM Radio, the combined company he ran that had just >>been blessed by regulators. >> >>He was planning to cut costs and expand a business that was already a fixture >>in the lives of millions of Americans. ''Forty-three cents a day -- it's not >>even vending machine coffee,'' 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 XM's 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 year's 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 -- used to finance >>sending satellites into space and attract talent like Mr. Stern (who was paid >>$100 million a year) -- at low rates for the foreseeable future until it >>could turn a profit. >> >>The company's 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 XM's 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 XM's problems could pave the way for a takeover by EchoStar, the TV >>satellite company, which has bought up Sirius XM's debt. >> >>Mr. Karmazin has been locked in talks with EchoStar's chief executive, >>Charles W. Ergen, over Sirius XM's options, people involved in the talks >>said. The men are said not to get along, these people said, and Mr. Karmazin >>had rebuffed Mr. Ergen's 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 XM's 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 company's prospects have dimmed. >> >>''I'm not trying to paint the rosy picture, because we have challenges >>connected to our liquidity and certainly our stock price is dreadful,'' Mr. >>Karmazin said in December. ''But, you know, our revenues are growing double >>digits. We're growing subscribers. We're not losing subscribers.'' >> >>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. > >### > > > > >Jonathan Mosen List Founder >Audio List Help, Guidelines, Archives and more... >http://www.pc-audio.org >To unsubscribe from this list, send a blank email to: >[email protected] Jonathan Mosen List Founder Audio List Help, Guidelines, Archives and more... http://www.pc-audio.org To unsubscribe from this list, send a blank email to: [email protected]
