Why Baseball will not be on Sirius
SPENCER OSBORNE
As I stated in my article, any contract can be renegotiated at any time provided that the interested parties are all in agreement that a renegotiation be conducted. The "merger of XM Radio holding and XM Radio has NOTHING to do with whether or not Baseball will come to the Sirius radio dial.
The MLB contract with XM pays baseball $60 million per year through 2012. MLB has the option to extend that contract at the $60 million per year terms for 2013, 2014, and 2015. XM has no say in this option. The option is MLB's alone.
At the end of 2012, MLB will either end the contract, or extend it. In my mind, they will extend it. The reason? Because they will not get $60 million per year for their content any more. Simply stated, who is going to pay $60 million for content that is more widely available now than it was when the original deal was struck!
At the time of the contract, MLB had worries that XM may not be able to pony up the money. This was a likely reason for the $120 million escrow account that was controlled by MLB. Should XM not be able to pay, the escrow would take care of two years of the contract. If MLB was astute enough to demand an escrow, one can imagine that they would have had thought about "change of control" as well.
Baseball has all of the cards. They can sit back and know that they hold a three year option. Thus, there is nothing Sirius XM can do about it but accept it. Unless they want to pony up the additional money that MLB is certainly seeking. Sirius XM wont do that, thus, a stale mate exists where MLB will get a pretty penny for content that is not worth as much as it used to be.
It only takes some REASONABLE thinking to see this clearly. REASONABLE PEOPLE ARRIVE AT REASONABLE CONCLUSIONS.