The IT Nerd

Liberty Media Corp who owns the Discovery Channel, QVC, among other assets, has purchased a $530 Million stake in Sirius/XM, which keeps the troubled satellite radio broadcaster alive and kicking for now. Sirius/XM CEO Mel Karmazin had this to say:

“We are pleased to have come to this agreement with Liberty Media, particularly in light of today’s challenging credit markets. Liberty’s investment is an important validation of what SIRIUS XM has already achieved and a vote of confidence in what we will achieve. This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM. By strengthening our capital structure and enhancing our financial flexibility, this investment allows us to continue providing the great content and innovative programming our subscribers know and love.”

Of course the fact that this deal will keep angry investors who were lining up to kick his ass boot him from his post at bay doesn’t factor into this of course.

So it looks like people who have these radios will be able to continue to listen to the Martha Stewart Channel, The Oprah Channel, and whatever else is on satellite radio for at least the short term.

The two headed monster known as Sirus/XM may have a white knight who will ride in to save the day after all. The word on the street (provided by Bloomberg) is that DirecTV is interested in buying the troubled satellite radio company:

An accord may help prevent Sirius XM from seeking bankruptcy protection or agreeing to a deal with satellite company EchoStar Corp. less than a year after Chief Executive Officer Mel Karmazin completed the merger of the only two U.S. pay-radio providers. Sirius XM has $3.25 billion in total debt and has until Feb. 17 to repay $175 million in bonds held by EchoStar.

If this report is true, then DirecTV needs to hustle. Feb. 17th is five days away. Of course they could wait for them to go TITSUP and buy the company at bargin basement prices. That would be the cheaper route IMHO.

Whatever happens, I expect it to happen quickly.

The word on the street (via the New York Times) is the two headed monster known as Sirus/XM Satellite Radio is about to go bankrupt:

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. [Howard] 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.

I’m glad that I don’t have this in my car as I would be really ticked right about now. There’s no telling how this would affect subscribers, but I’m guessing that in the short term there’s likely to be no interruption to service.

More importantly though, Howard Stern is going to have to find a new platform to be the “King Of All Media” from.