Thinking about EchoStarSiriusXMSatelliteRadio Inc.

February 5, 2009

Because of a big upcoming debt payment — and a stock price of about 14 cents a share — Sirius XM Satellite Radio finds itself in quite a predicament.

This, apparently, hasn’t been lost on EchoStar’s Charles Ergen, who may be getting ready to take over the company.

According to the Wall Street Journal, Ergen has recently acquired part of a $300 million tranche of Sirius debt that matures on Feb. 17: “Sirius recently converted part of the debt to equity, reducing the total debt outstanding to about $175 million. It isn’t clear whether Mr. Ergen participated in the exchange, however. Mr. Ergen could also be buying up senior bank debt, due in May, which trades thinly on the over-the-counter market.”

Given all this, we now offer some food for thought:

  1. How does Sirius XM’s Mel Karmazin feel about all this? After all, he is a well-known dealmaker. Is he ready to sell? Ergen could be doing him a favor.
  2. If this does pave the way for an EchoStar takeover, would such a deal even make sense? Is there any business wisdom in combining satellite radio and satellite TV?
  3. And where would such a deal leave Karmazin? Satellite radio has been his baby, would he leave the game altogether? If not, then how could he work with Ergen? Remember, Karmazin and Sumner Redstone? Not exactly a match made in Heaven.

Keep an eye on:

  • Hollywood may at last be having its Napster moment — struggling against the video version of the digital looting that capsized the music business (NY Times)
  • Warner Music Group posted better-than-expected results on Thursday, despite falling CD sales and slower growth in digital revenue (Reuters)
  • Online DVD company Netflix Incon said one million Microsoft Xbox 360 video game console users have activated Netflix’s movie streaming service in the three months since the two companies formed a partnership (Reuters)

(Photo: Sirius XM Chief Executive Mel Karmazin/Reuters)

One comment

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Maybe you idiots should get your facts straight before writing an article. The stock closed at .165. Not super, but not .14. If EchoStar was looking to force the issue, they would need to get in line behind many others before they would even have a chance to get their money. The FCC would in no way allow them to purchase the company. So where does that leave us? This could very easily be a partnership. Of course you idiots from the WSJ and Reuters don’t bother doing your homeowkr or getting your facts straiht before spouting out more of your nonsense.

Why don’t you post a correction so you can bump your garbage back up to the top of the news queues so it looks like you are actually reporting something AGAIN.

Maybe the WSJ and Reuters need to get back to actually reporting the news instead of always trying to create it. Maybe then someone will respect you as a news source.

Posted by egiscodr | Report as abusive