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Sat Radio and Liberty Media Reach Deal

Discussion in 'Sirius XM General Discussion' started by MLBurks, Feb 17, 2009.

  1. MLBurks

    MLBurks Icon

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  2. Richard King

    Richard King Hall Of Fame

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    I assume he meant interest rate of 15%. WOW. That's a ton of interest. But then when you are over a barrel I guess you pay it.
     
  3. Richard King

    Richard King Hall Of Fame

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    Mar 25, 2002
    There's the dillution to current shareholders.
     
  4. Richard King

    Richard King Hall Of Fame

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    Under 15% annual interest Liberty doubles their money in just under 4 years, about the time that the loan comes due. When it's all done in 2012, SIRI will have paid out interest of just under 250 Million and still owe $250 Million in principle.
     
  5. Richard King

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    DirecTv stock is getting totally slammed this morning. It has held up fairly well through everything recently. This move today has it down nearly 8% before hours. Then again, Dish is also getting slammed which surprises me.
     
  6. Ken S

    Ken S RIP

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    Gotta give Mel some credit here...he has saved control of the company and kept them out of bankruptcy.
     
  7. Steve615

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    Middle TN area
  8. wilsonc

    wilsonc Legend

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    How do you figure that? In using a simple interest formula, I get $150,000,000 in interest in 4 years and using a compounding interest formula, I get $187,251,526.50 in interest.
     
  9. Richard King

    Richard King Hall Of Fame

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    http://en.wikipedia.org/wiki/Rule_of_72
    I was off by a year. Still, not much difference though on a compounded basis.
     
  10. Tom_S

    Tom_S Icon

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    Apr 9, 2002
    For the moment. Paying off debt with more debt with a crappy rate(for Sirius) is not necessarily great management.
     
  11. scott72

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    Feb 17, 2008
    Yeah but they're just delaying the inevitable now. Come on, 15%?
     
  12. scott72

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    Feb 17, 2008
    I'm glad I got locked in for my $77 for the next year already, as I don't think they're going to be as generous with deals now that they'll be around for another 3.5 yrs at least.
     
  13. redfiver

    redfiver DBSTalk Club Member

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    Nov 18, 2006
    it's not a bad idea. SiriusXM still generates tons of revenue, they just needed to restructure their near-term debt to get over the hump of startup costs. They did this why retaining control of the company so they can execute their long term plans to increase profits and shareholder value. I think Mel did a pretty good job of getting this done. Lets give him a chance to actually execute on all the plans they talked about pre-merger.
     
  14. hdtvfan0001

    hdtvfan0001 Well-Known Member

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    Liberty is making money....SM is not.....if not for the 15% interest..this would be a financial debacle for Liberty.
     
  15. Reggie3

    Reggie3 DBSTalk Club Member

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    Feb 20, 2006
    and in the end will it allow Liberty to obtain the company when it defaults on the interest payments?

    I'm not a lawyer nor do I play one on TV
     
  16. Ken S

    Ken S RIP

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    The other choice was going to be bankruptcy and a control fight that may have led to liquidation. Obviously 15% isn't great...but the 40% share in the company is the key to Liberty...If the company is profitable on a cash flow basis they'll have a large piece and perhaps be able to then deal for control.
     
  17. Ken S

    Ken S RIP

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    Feb 12, 2007
    They got a large piece of a company with 20M subs and $2B a year in gross income. They could end up with control for an investment of 25% of the annual gross...that could be a very good deal for Malone.
     
  18. kwajr

    kwajr Icon

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    Apr 7, 2004
    what does this do for the debt echostar bought up,did liberty just pay that off basicly.
     

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