Sirius: Give Me Liberty or Give Me Ergen

February 12, 2009 at 5:44 am PT

The Sirius XM fiasco is fast becoming high drama. Hoping to avoid bankruptcy and fend off an unsolicited takeover attempt from satellite mogul Charlie Ergen’s EchoStar, which has been acquiring its debt, Sirius has approached Liberty Media about a possible transaction. “People briefed on the negotiations” say talks between the two companies are advanced, but it’s not yet clear how much Liberty would be willing to invest in Sirius and whether it’s even interested in taking control of the company.

Like EchoStar (SATS), Liberty Media’s interest in Sirius (SIRI) revolves around the company’s physical assets–satellite and terrestrial repeaters, towers that bolster satellite radio services with Liberty’s DirectTV (DTV) satellite television services. Said Stanford Group analyst Fred Moran: “All of these companies are satellite-delivered media. If you can cross-market, cross-promote and intertwine services between satellite video and satellite audio, you could strengthen your competitive position.”

Question is, is Liberty Media (LINTA) interested in such a thing and is it willing to repay Sirius XM’s debts and buy out the company’s existing shareholders to do it? If it’s not, Sirius may well be forced into bankruptcy, which company officials reportedly claim is preferable to inking a deal with Ergen and EchoStar. Seems Sirius CEO Mel Karmazin can’t bear the thought of giving up control of the company to Ergen.

Sirius shares are trading higher this morning on the news after being viciously beaten down Wednesday by reports that the satellite radio company is mulling a Chapter 11 bankruptcy filing.

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Tagged with: Charlie Ergen, Dish, DTV, EchoStar, John Malone, John Paczkowski, Liberty Media, LINTA, Mel Karmizan, Nasdaq, New York, SATS, Siri, Sirius Satellite Radio, Sirius XM

comments so far. Add yours.

http://allthingsd.com/ Dave Barnes

Never, ever take your wallet to a meeting with John Malone.

No one puts a deal together the way that John (PhD in Math) does. You walk of the meeting thinking “that went well” and discover that John has controlling interest in everything.
Jeff Stevens

Echostar can’t even get rid of Tivo, and it wants SIRI?
Perhaps the thousands of SIRI individual investors should start shorting SATS since it has a hard time making money as well. Fitch also branded DISH’s debt as junk in January.
http://digitaldaily.allthingsd.com John Paczkowski

“Never, ever take your wallet to a meeting with John Malone.”

Straight into the daily video, Dave. Tx.
Arlen Hart

I like the creativity of the tile, except it really should have been “Give me Liberty, or give me Dish”.