Sirius XM Choices Could Affect Contracts
February 6, 2009 at 5:27 AM (PT)
Can SIRIUS XM RADIO stave off both bankruptcy and a takeover by ECHOSTAR? With CEO MEL KARMAZIN trying to raise or refinance $175 million in debt by FEBRUARY 17th, the company's choices could include Chapter 11 bankruptcy, which would allow it to drop some of its more expensive contracts, and the WALL STREET JOURNAL speculates that one of those contracts could be HOWARD STERN's $500 million, five-year deal. STERN said THURSDAY that "I just need to know who I'm working for on any given day."
The JOURNAL also notes that the company must pay $43 million to the NFL on FEBRUARY 17th and has $60 million in escrow for MAJOR LEAGUE BASEBALL, which it must pay to MLB in MARCH, and the JOURNAL says that a source tells it that SIRIUS is "negotiating hard" to get MLB to let it tap those funds.
CHARLIE ERGEN's ECHOSTAR, parent of DISH NETWORK and SLING MEDIA, has purchased part of a $300 million tranche of SIRIUS debt, sending SIRIUS shares up in THURSDAY's trading.