Sirius XM Does Some Housekeeping
The last couple of quarters for Sirius XM have bolstered the confidence of many investors, but as always there is still some housekeeping to do, and the company performance needs to be proofed. The company accomplished a little bit of housekeeping last week by consolidating two of their wholly-owned subsidiaries. Effectively, XM Satellite Radio Holdings was rolled into XM Satellite Radio, Inc.
What does this mean to the average investor? At this point very little. The benefits of this move will more likely bear fruit later on. What is happening should be considered a big step for the future of the company. Sirius XM Radio is cleaning up their balance sheet, and simplifying things. It is moves like this that will bring more investors into this equity as their quarterly performance continues to demonstrate that the satellite radio is on the right path for growth and profits.
As with many filings, people tend to read and react without understanding what is really happening, and often this creates confusion, and by extension, a series of e-mails to my in-box. Some even derive extremely complex scenarios by trying to “read between the lines”, when the most logical explanation is often the most simple one. The 8K which detailed this transaction is simple and straight forward. There is no reason to draw conclusions that simply do not exist.
The most popular question I have received is whether or not Sirius XM can now re-negotiate contracts (especially the MLB contract). The answer is that ANY contract can be re-negotiated at any time so long as that ALL INTERESTED PARTIES are open to that type of discussion. This latest move by Sirius XM did not materially change anything in these contracts. With regard to the MLB contract, one only needs to ask what is in it for Major League Baseball? The simple answer…NOTHING. Major League Baseball has NO REASON to re-negotiate. They are being paid handsomely for the current contract, and hold an option to extend that handsome pay-day for another three years at the same handsome payment. Baseball has all of the cards, and would be fools to re-negotiate. Rest assured, Sirius XM has likely sat at the table with MLB more than once regarding this issue, and has always walked away with nothing. Simply stated, the baseball deal will stay exactly how it is.
Housekeeping is a good thing. Cleaning up the balance sheet is a good thing. Neither are very sexy, and neither will drive the price up instantaneously, but BOTH will pay off as the quarters continue to roll by.
Spencer – My guess is nothing happens with baseball until the FCC mandated 3 year price freeze comes off summer 2011. Once that happens nothing stops Sirius and MLB getting together and doing some premium pricing options to get games on Sirius. Only logical.
What is most important to me as a listener is getting Howard on the cellphone apps. I have to hope that will be part of the negotiation on the next contract.
He is on the Iphone.
I got an app. 5.0 police scanner and you can type his name in the search and get Howard 100 and 101.
I am not happy that Siri is allowing this.
Check it out the app. is 1.99
“Sources indicated that the NFL and NBA, which originally signed exclusive deals with Sirius, “allowed their game programming to be broadcast on both for the same rights fee they had been getting.” But MLB is “holding out, unless it can work a better deal, which almost certainly means a higher rights fee.” MLB believes that the “volume of its game programming and its traditional appeal make it more valuable to satellite radio” than other sports properties. However, Morgan Joseph & Co. analyst David Kestenbaum said that Sirius XM “does not have the money to keep paying so much in rights fees.” Kestenbaum: “I thought the original MLB deal was a foolish one for XM. I don’t think enough new subscribers signed up to justify paying $60[M] per year.” MLB’s deal with XM expires in ’15, and industry experts believe this the could be baseball’s “last chance to have leverage with Sirius XM.” Kestenbaum: “There definitely won’t be any bidding wars for these sports rights next time”” (SOURCE: SPORTSBUSINESS JOURNAL, 3/9 issue).
He is on the Iphone.
I got an app. 5.0 police scanner and you can type his name in the search and get Howard 100 and 101.
I am not happy that Siri is allowing this.
Check it out the app. is 1.99
I may be dense, but I still don’t get it. MLB made a deal with XM. Now, Sirius and XM have merged, a legal transaction. Therefore, they are the same company. So, I don’t understand how MLB can say its games can only be broadcasr on a portion of this new company: the XM portion. What kind of merger is this where one side benefits more than the other?
I wish that they would combine my XM 2 radio account with my Sirius 2 radio account!
delta merged with Northwest and I got 1 ticket and 1 Frequent flyer and 1 Small Business account .. Why can’t these yahoos merge the customer accounts?
It’s easy enough to do from a backend system and would simplify my requirement to maintain 2 separate accounts .. because I can’t control the limited (Only) choice the Auto manufacturers and Audio Equipment manufacturers place in their equipment …
This merger has been total Bush League….