Sirius XM Media Conference Presentation Highlights
For those of you looking for the words Apple or Microsoft, you can stop right here. Although the iPod was briefly mentioned, it was only briefly touched on in a sense that any deals would have to be beneficial to Sirius XM shareholders.
Stating that Wall Street has avoided investing in media companies citing the fact that “they suck,” Mel outlined the 13% growth in Satellite radio as compared with the -3% growth of terrestrial.
One exciting point to the presentation is a firm date of October 6, 2008 for “a la carte” radios and “best of programming packages” to hit the market. “Best of both” packages will include as expected, the most sought after programming.
- SIRIUS on XM XM on SIRIUS
Howard 100 NBA *
Howard 101 NHL Home Ice *
Martha Stewart Living Oprah & Friends
Radio The Virus
SIRIUS NFL Radio * Public Radio with Bob Edwards
SIRIUS NASCAR Radio College Sports *
Playboy Radio PGA Tour
One of the first points I made when the merger was approved was my feeling that Sirius XM should use this opportunity to seek out those customers who have not subscribed because their car happened to come with the wrong radio. As of October 6, Sirius customers will be able to access the NHL and Opie and Anthony. That’s right, it looks like O & A are going to stay! As for XM subscribers, October 6th brings not only Howard stern but the NFL on XM! In my opinion, this is a huge opportunity for Sirius XM going forward.
October 6th is also the date for “a la carte” radios to hit the store shelves. Yes, you read that right! Well before “black friday!” This should bode well for the holiday season. Mel also hinted about a brand new XM wearable that will be debuting soon, calling it “really cool!”
A few other details, include an expected increase in merger synergies, although Mel still insists on being “conservative” by his own admission, stating that he’d rather miss to the downside than the upside. The company has now increased the expected merger related synergies from 400 million to 425 million dollars. The company spent a lot of time detailing line by line each and every area in which various synergies would be found.
He also dealt extensively with Febuary 2009 converts and stated that there will be no dilution as a result. He made it clear that the converts will be repurchased through cash on hand, bank loans and even implied a willingness to loan the company the money himself if it came to that due, to a tight credit market.
Of course Mel addressed everything you’ve heard or read discussed here on SiriusBuzz and SiriusBuzz Radio regarding OEM penetration rates and the like, but I’ll let the copy and paste guys tell you about that.
An audiocast of today’s presentation by SIRIUS XM at the conference is available at the investor relations section of the company’s website, www.sirius.com. The audiocast will continue to be available until 5:00 pm, ET, on Tuesday, September 16, 2008.
Position: Long SIRI
Thanks Mel . . . same shiv (in the shareholders backs), different day!
Cos, did you see anything encouraging here?
I think there was good news and bad news on the revenue/subcribers. The sub growth is alot less then many would like to see. The interesting thing is the revenue has still gone way up.
Until Sirius and XM TRULY become ONE company…synergies won’t be what they say.
I mean…right now it is still in essence TWO SEPERATE companies with TWO separate lists of radio channels.
For instance. Right now they have TWO 70s channels. TWO 80s channels. TWO OF EVERYTHING.
Until they can go in and CUT this fat…they won’t realize TRUE synergies. The ultimate idea and benefit to shareholders is to be ONE. But right now, and until TRUE interoperable radios are available…its like running two seperate companies. And lets face it…XM was a company about to go out of business.
The sooner Mel erases ALL the XM fat the better.
The “Best of” starting October 6th is a start….but “BEST OF” is not ONE.
It’s going to take AWHILE until they can risk pissing off current XM subscribers. They can’t just go in and cut out all the XM stations.
Interoperable radios are the key to enabling this. But even after interoperable radios come out…you can’t just make the break. Alot of people won’t want to buy new radios. So this could drag on for a loooooong time. It’ll be a sloooow transition.
No Sirius built into toasters, dam !
Only hope investors have is that analysts may upgrade, just purely based on the stock price being undervalued.
If not, then we will drip lower over next months until 3Q CC.
What did we learn to day that is new…
An additional $25 million in Synergies
Slow growth in OEM’s
Best of, Oct 6th
Nothing new in the debt refinance dept.
I hate see the notes from analysts.
Karmazin: National radio advertisers ‘leaving in droves’
11:52 AM ET 9/9/08 | Marketwatch
CHICAGO (MarketWatch) — Sirius XM Satellite Radio Inc. Chief Executive Mel Karmazin said the company is still short of his goal of having advertising comprise 10% of revenue, partly because in the current environment, national radio advertisers are leaving the medium “in droves.” This is a development that affects both traditional and satellite radio players, Karmazin said. “As our subscriber base grows, we should become more attractive to national advertisers,” he added. “I still prefer our model to terrestrial radio, which is entirely based on advertising. I like that we have subscription revenue.”
Karmazin: Exploring options to pay debt due in Feb. 2009
11:36 AM ET 9/9/08 | Marketwatch
CHICAGO (MarketWatch) — Sirius XM Chief Executive Mel Karmazin says the company is exploring various options, including discussions with a bank, and will “act opportunistically” to make a $300 million Sirius convertible debt payment due in February 2009. By May of 2009, when a $350 million payment on XM bank debt is due, Sirius XM expects to extend the maturity of that debt, Karmazin said. These moves will make it easier to handle a payment due in December 2009, Karmazin said, despite “how horrible the debt market is” at this moment. There has been a great deal of concern about how Sirius XM financed its debt to close the merger that created the combined company earlier this year.
I gave you the highlights, now the lowlights…
That had to be the WORST speach I’ve ever heard from Mel.From my perspective, the killer comment was estimating 2009 sub growth to be lower than originally forecast. Even though he said he was underpromising, he low-balled it so low, that he killed any chance of the stock recovering any time soon. He actually forecasted less subs next year than this year.
He did that following a statement that ad sales were way off as a revenue source going forward, and was glad to have subscriber revenue. Sub revenue yet he lowballs the sub growth?
I just can’t beleive he said that…
You just took the words right out of my mouth. I agree this was a very bad CC as it reflects in the pps. Wienkes will have a field day.
Like fccfoff metioned above, why are we still dealing with 2 similar channels of many things. I understand that there are hardware issues but isn’t there a way to cut out all of XM’s wasteful overhead, move all of the XM channels Sirius will keep over the the Sirius’ headquarters and move on. I don’t understand why we are contiuunig to bleed shareholder equity by paying for un-needed expenses. Let’s get it done.
next low – light.
did anyone catch the thing about credit markets being awful? Mel is saying he can’t get good terms. Mel said he hopes he doesn’t have to lend the company his own money…WTF was that????
Brandon,
I didn’t interpret Mel’s comments to be that he couldn’t get good terms. He said they are exploring their options and that they WILL get reasonable terms either from a bank OR individual investors. He indicated that dilution is not on the table.
are we going lower Bradon
A lot of positives came out of the presentation by Mel, as I interpret them. I could not believe some of the negative headlines around the news world. Slowing subs, lower than anticipated sub rates? In this recession environment I would have been happy with almost any increase. But they choose to highlight the negative from what I thought was a very positive presentation. It appears SIRIUS XM has many skeptics that want to destroy it. Or maybe they are just inept?
It is time to put the company up for sale.
I heard enough today to make me hold on to my position Long in the stock. Sub growth projections are ridiculously low but I think its because they have no idea on churn yet. With new programs ala-carte requiring a new radio, canceling of one sub and adding another to get what you want, its going to take a several quarters to see how it shakes out. They didn’t address used cars at all, that’s an ace in the hole. I liked no dilution of stock to refinance in February, and even with 15% rates that will net out $45-50M in addition int. exp. The credit facility in May 09, will be extended at 5% to that for and additional $17 M annually in int. exp. Share dilution was my primary concern. I wasn’t happy to hear MLB isn’t in the B of B plan, but spectrum is probably the issue and bringing XM subscribers over the goal. All in All I really didn’t care how he said it, the fact of the matter is he said it. Now lets execute the plan.
$1.09 and falling…this is UNREAL!
Who will finish higher today:
SIRI of FRE
?????????????????????
Time to put the company up for sale? I don’t think so, BUT wouldn’t it be sweet if someone made a generous, unsolicited offer?
How about $3.00 per share? Would you take it as a shareholder?
Hey cos, think Jim Cramer killed your stock this time? lol
Hey cos! LOL what more needs to be said!
At this point, it would be hard not to. But even if the offer were rejected, at the very least, the stock would stop getting bashed. And the thought of the short squeeze that would ensue is giving me goosebumps!
I can’t fathom why Mel would harp on the fact that advertising for terestrial radio is down (and indicating that it’s not a great potential revenue vehicle for Sirius XM). I also can’t understand why he did not make light of the fact of the bad credit market, but instead seemed to get somewhat downbeat. It’s almost as if he was going stronger in the beginning of the conference, and then kind of lost it. I think his lack of strength at the end part of the call led, in part, to the plunge in the stock price after the call. Of course, the rumors of iPod/iPhone not coming to pass did not help either. Good luck to us longs.
a la carte & ‘best of’ packages = more confusion for customers. This isn’t progress.
GetItStraight, they are now able to use the same content for both and just recast it. That saves money. As an example there would not be 2 different 70s channels, just one and it would be the same thing on both, that once again saves money.
As to the rest, as we know and how many times does it have to be said. Mel is a under promise and over deliver type of guy. I will give you an example in 2005, they were 200,000 subcribers short of the projections for the year by the end of the 3rd quarter, and Mel even when pressured would not raise the year end projection. In the end of that year they beat the top end projection by over 150,000 subs. I still belive, there will be increases in all of these projections for 2009.
The only thing I am mad about is that instead of waiting a little longer I started to buy back in at 4. I wish I would have waited till it hit 3, then I would have more of it by this time. I have to say in all the years of investing I never have seen a stock with such a great outlook do what SIRIXM has. While financing is still a problem it is not that big of one, that cannot be overcome even if the terms are not so great for SIRIXM. Banks are not going to lose what they have in the companies, when the company in question is just a few quarters of being profitable and being able to pay them back. That just seems to be to much common sense to me. As for the PPS that seems to me not to make that much common sense so I have a hard time believing in the truth of it, when all the running metrics show the opposite of todays PPS should be happening.
Hey I’m not Jim Cramer, Show me where I care one way or the other what Jim Cramer says. I think he’s an entertainer. I think he is bought and paid for by GS. I would never follow his advice, period. So LOL all you want it means very little to me. Enjoy yourself.
Why the assumption that XM will be “gutted”. You do that and you suddenly lose hundreds of thousands of subs. I suspect the music channels will more reflect XM than Sirius in the long run, and XM has the technology advantage.
I also noted Mel seems to dislike the Sirius Headquarters more than the XM one, because Sirius had a more extravagant studio.
JRT – That would be just fine – consolidating into XM’s headquarters. My issue is that we don’t need 2 of everything. Start chopping. I’ve been a subscriber for over 2 1/2 years and would love to hear some of XM’s channels without having to pay more. I will pay more because it is probably worth it but like Pinball Wizard above said, a la carte and best of seems to just cloud things. Do what do best and push as hard as you can. To me that is $12.95 month for awesome radio that you just can’t get on terrestrial. Just my 2 cents.