Liberty Media(NSDQ:LCAPA,LINTA) has decided to wash its hands of any collaboration with Worldspace (OTC BB: WRSPQ) in helping them re organize and come out of Bankruptcy. Court filings from yesterday;
http://www.kccllc.net/Docket/SearchResults.asp
show that once Worldspace submitted their rebuttal to Liberty Media’s plan with some obvious changes to their benefit, Liberty cooled very quickly on the deal, remaining silent and avoiding any sign of agreement to the revised deal. Apparently, the Worldspace staff and attorneys handling the deal didn’t understand that when you deal from a critical position, and are basically on life support, it’s best not to annoy those who are keeping you alive and giving you your last best shot at survival.
Liberty Media still owns over 100 million in claims regarding Worldspace, so there is still the possibility they get what they really wanted out of the Bankruptcy proceedings. Worldspace now faces total liquidation and either sale or de orbiting of their satellites. No further details are available at this time
I do not believe the issue here is WS stubborness. Rather, perhaps LM have woken up that there are huge and fundamental structural problems with the WS business plan which are irreversible. The surprise is not that they are backing out, but that they got to where they are in the first place. WS, especially in Europe, is an infectious lethal disease. Always has been, always will be. You get exposed to it, go delirious, and die. What Liberty should do is take a long hard look at Ondas Media.
Roger,
So you claim to know more about this situation than Liberty Staff , accountants and attorneys. How pompous of you! Do you also know that Liberty submitted a plan they were willing to sign off on…and WRSPQ people made modifications which were unacceptable to Liberty! That is what destroyed these negotiations. Liberty was never intent on staying with the original Worldspace business model, so your thoughts are incorrect. Do some research, the India and Africa operations sites were shut down, because Liberty had no interest in carrying those operations forward.
both wrong, read the documents Steve links to.
Libert abrubptly and w/out explanation cut of discussions some time ago.
No China,
Not wrong! Read thru the filings….Liberty gave Worldspace their plan…Worldspace tried to modify it…..Liberty then chose the silent treatment….aka screw you!
I hope you are correct. It would be a little better if Liberty had real reasons. Sirius needs to keep all the good rumors flying it can.
Nicer article, Steve. IMHO this is a huge mistake on the part of Worldspace to salvage something from a dire situation. I think it is a win for Liberty. I look for this Chapter 11 to be converted to a liquidation Chapter 7 and Liberty still acquiring anything that it chooses through the bankruptcy court, but then again I may be totally wrong on this? Time will tell…
they’ve extended the deadlines to April 17 and June 17
…will Liberty jump back into the mix?
Nice catch China! WRPSQ now has to find a way to appease Liberty and that 100 million plus claim they own.
check out the new reply from Liberty to the motion filed by Worldspace
http://www.kccllc.net/documents/0812412/0812412100318000000000002.pdf
I’ve been called a lot of things but never pompous. What if i do know as much if not more than Liberty? What if i came from inside WS and know that it’s all a pile of dead bones? It was before Liberty came to the table and it still is. It’s about “discovery”. Perhaps Liberty have found out that the French filing for future European broadcast rights is withdrawn. Or that Fiat has backed out. Or that the German and Swiss administrations have retracted terrestrial licenses. Or that UK OFCOM have auctioned the spectrum to Qualcomm. Or that no OEM will adopt their technology. Or that Sweden, Norway and Finland are re-farming the frequencies and that many other administrations are in the process of doing the same. Or that the satellites on orbit are failing and useless for mobile services. Or that the ancient spare satellite on the ground is designed to launch on the now decommissioned Ariane 4 rocket.
Don’t take it personally. Sirius XM can and will do very well. But not WorldSpace.
IMHO
the ofcom was early last year, are you suggesting Liberty didn’t know about this? Your information makes sense but I would hope Liberty would already know about the issues your present.
the auction takes place today, yes? guess we’ll know in a few hours if Liberty is still involved.
Roger, anything else you know?
I think it is extremely likely that Liberty were not fully aware of the impact of the terrestrial licenses on the business, especially that of OFCOM. Nobody has the luxury of disregarding the UK market in a meaningful business plan. And I absolutely know that Liberty was not aware that the French CSA re-assigned the rights of the filing for the new system to a third-party, not Worldspace and certainly not Liberty. And I know who that third-party is, and that they cannot assign it to another company without starting the CSA and possibly ITU process over again! I am certain Liberty didn’t know any of this then (but they do now!!!). We tend to put too much faith in organizations like Liberty to have some phenomenal insight that nobody else knows about. But the terrestrial licenses in L-band are a very big problem not solved for decades by thousands of engineers and bureaucrats throughout Europe – so don’t expect a couple of bright guys in Denver to march in and straighten it out.
Since it isn’t straightened out, car companies simply think it is stupid that a car made in Germany will work in Italy but not France or not the UK. So that dries up the pull market for the business. The rest is left to retail which Europeans are inherently adverse to buying another electronic toy costing 200EUR with a pay subscription and not working well in most of Europe. It’s nonsense!
Ondas Media knows all of this and that is why if John Malone is serious about Europe then even his own partners will tell them he should be working with Ondas, just like BMW , and Nissan, and Renault, and many many others.
Liberty did what they did for Tax loss harvesting and to try and get the FCC to re-assign the Afristar slots to them (Don’t confuse this with the Musicaa filing from the French i referred to). This could be worth something. Someday. Maybe.
Always happy to help if you have any specific questions.
Roger,
Appreciate the insight. Would be helpful if Ondas updated their website though and perhaps began to slowly reveal their ultimate plan for Satellite radio in Europe. I’m surprised Liberty has not looked to or at Ondas yet, maybe they will now that they have backed off of Worldspace. I know Ondas is signing content agrements already, when will they start to broadcast…if you know…or are they capable yet?
asm610,
As I see it, Ondas play their cards pretty close to their chest. It was reported that the Solaris satellite has gone through anomaly resolution and has capability for key early markets in Europe. Given Ondas’ team on the technology side, (Delphi, Fraunhofer announced), it is very reasonable to assume that they could have radios in the marketplace for early-adopter/demonstration service in the coming year – which would align well with the content production agreements you referenced. What has been clear from their public presentations is that its all about the content design. The deals they announced with RTL, Rotana, JazzFM, Talpa, others, are revelatory in that it shows diversity, exclusivity, supreme quality – - best in class. That’s what it takes to sell subscriptions.
Their mainstream OEM radios would take longer, probably 2012.
I would be shocked if talks with LM have not already happened and probably continue to happen. From everything I see, this is not a company to be taken lightly. One thing is absolutely certain: neither Liberty/Sirius/WS/etc, nor Ondas want to repeat what happened with Sirius and XM pre-merger. They will both fail for sure if that happens.
Best
Roger, I too appreciate the insight. I agree that Ondas could be the play here. Quick question, what do you make of Afristar 3 on the launch schedule per this link:
http://www.satelliteonthenet.co.uk/index.php/2011
Smoky,
Somebody hasn’t updated their database, or has been given unrealistic projections. There isn’t much to these kinds of logs – i’ve input to them many times over the years. I would expect that this input is updated by a project manager at WS, or their PR department. One thing I caution clients is that you can’t believe one single representation made by WS in the Samara era. The bankruptcy Non-Disclosure Agreement came with a disclaimer!!!! Think about that one!
On the other hand, the Sirius FM5 and FM6 are beautiful, monstrous birds that burn through trees and rooftops. They are a work of art and Rob Briskman at Sirius, and Loral, should be complimented. They are a nice supplement to the fleet. A technical achievement not even thinkable when the first XM and Sirius constellations were developed. That is vision. Sirius deserves a better shot at Europe than WS.
Sorry first time I read these comments.
Ya, Im not buying it James. Just my opinion. The tax loss, no way, not why they did this. Didnt know the things you said. Maybe some of them, but come on. Liberty has been buying media assets all over Europe. Sirius has existing contracts with every auto maker. I still say the play is very much on.