Liberty Archive

15

The Dawn of a New Media Era as Defined by Liberty’s John Malone and Sirius XM’s Mel Karmazin

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By Rick King -a_sunrise_over_earth

Every few generations our culture finds new ways to define itself. Usually there is no stronger indicator of culture’s shifting winds than the music a generation listens to. The method in which a generation listens to its music defines it as well. Is it possible we are in the midst of exactly that? Another media revolution of transformation in the winds, from terrestrial radio and television broadcasters to satellite media?

The current population wants access to information everywhere and on demand.  Generation “Unlimited” has no concept of limitation.  They live in a world where information of every type is available at the speed of an electron in more forms than they can count.  Information and how it is channeled to a user permeates every aspect of business.  AM and FM Radio don’t work everywhere geographically so it’s fading.  Same thing for television, initially change came in the form of cable and now with continuing dominance by satellite media.

How many people still remember the world of no television?  Black and White television broadcast?  The days when AM radio was the mainstay of the American living room?  In every single instance of such change, critics denied the very possibility it could happen.  Emotions have always  run especially deep in American society when it comes to our music and how we listen to it.

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17

Liberty Washes Hands of Cooperative Agreement with Worldspace in its Bankruptcy

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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

8

Sirius XM Radio Returns to Subscriber Growth During Brutal Economic Conditions

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By Relmor Demitrius -

Sirius XM Radio (NASDAQ:SIRI), which is 40% owned by Liberty Media (NASDAQ:LCAPA), achieved something few companies in their industry, if any, did in 2009:

They came out of 2009 in better financial shape and returned to subscriber growth during one of the most difficult economic periods possible. 2009 was a troubling time for the newly merged radio companies.  Huge debt obligations were due, the economy was in shambles, and the auto industry wasn’t selling enough cars.

What a difference a few quarters can make.

The satellite radio company entered the year with 19 million subscribers.  After losing 500,000 subscribers in Q1 and Q2 combined, they regained 105,000 back during Q3, reversing the trend.  That leaves them with around 400,000 subs under what they started the year with as of Q3.

Let’s run the numbers and see what Q4 will probably look like:

October through December auto sales totaled around 2,593,000 for the United States.  Penetration rate of the company’s products in these vehicles was going to be in the high 50′s, according to Mel Karmazin, CEO of Sirius XM Satellite Radio. Im going to assume 58%.  By this figure they should be adding (from the OEM channel) around 1,503,940 new subscribers, while losing around 1,053,000 from deactivations (assuming a 1.9% churn rate, lower than last quarters, but higher than Q4 of 2008).  Im giving credence to improved economic conditions, but also still accounting for a supressed economy.  1.9% churn should work for this calculation.  During the last 3 quarters churn has been 2.2%, 2.0%, and 2.0% respectively.  Assuming 1.9% in a traditionally strong churn quarter is fully reasonable given the conditions.

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4

Liberty Media Working With Sirius XM Radio Could Have Global implications & Impact Ondas Powerbrokers

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Recently, rumors have been running rampant regarding the relationship between Sirius XM Radio (NASDAQ:SIRI), Liberty Media (NASDAQ:LCAPA) and Worldspace (OTC:WRSPQ). There has been some very misleading information laid out in all instances.  Most recently, an article claiming that Delphi and Ondas were ruining any chance Liberty had to use Worldspace and Sirius XM Radio to capture Europe and other areas globally.(http://www.rapidtvnews.com/index.php/200912065371/delphi-knock-out-for-siriusworldspace.html)
Well, as I always say, a little investigation goes a long way. Upon doing some research and reviewing the Delphi website, I found this interesting Press release from 2006:
Release Date: January 04, 2006:
LAS VEGAS — Delphi Corp. announced today that it has become a strategic investor and technology provider for ONDAS Media SA, (ONDAS) the premier European satellite radio company. Delphi made the announcement at its media briefing here today at the 2006 International Consumer Electronics Show. Delphi officials said the company has made significant cash strategic investment in ONDAS. ONDAS expects to launch a full subscription-based satellite radio service in 2009 with more than 150 channels of music, sports, news and entertainment as well as digital telematics and data services across Europe.(http://delphi.com/news/pressReleases/pressReleases_2006/pr66602-01042006/)
3

Sirius XM to Be Spun Off By Liberty….?

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Greg Maffei said Thursday that Sirius XM may eventually be spun off. This has led to much speculation. One needs only to look at Liberty’s history and recent events regarding Liberty and Direct TV (DTV) in which Direct TV was joined with the broadcasting and programming assets of Liberty Media’s Liberty Entertainment unit and spun off. The move combines the home satellite TV provider with Liberty’s programming units, including Liberty Sports, the Game Show Network and Fun Technologies. Through the spin off, the new entity will assume $2 billion of Liberty’s debt and $30 million in cash. DirecTV will also make $650 million in Liberty loan payments.

“This transaction clarifies DirecTV’s capital structure, reduces its shares outstanding, eliminates stock overhang and arbitrage issues, and provides DirecTV with strategic content businesses,” said Greg Maffei, Liberty president and CEO. “And this transaction offers value to Liberty’s shareholders by eliminating the discount in our tracking stock structure and allowing them to continue to participate directly in the strong performance of DirecTV.”

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