.

Sirius XM Avoids Bankruptcy, Reaches Deal with Liberty Media

By 
February 17, 2009 3:17 PM ET

Thanks to an infusion of cash from Liberty Media, Sirius XM will not file for bankruptcy. Under the terms of the agreement, Liberty — a conglomerate that also owns QVC, Expedia and a 48 percent take in DirecTV — will invest up to $530 million via two payments to the beleaguered satellite radio company, according to Billboard.biz. In exchange, Liberty will get a minority stake of the company and 12.5 million preferred shares of Sirius XM stock; that stock is currently worth 17 cents per share. Sirius XM has struggled to pay off its debt since the two companies merged in November 2008. In January, news broke that the service would raise its subscription rates in an attempt to scrounge up some cash.

Had the deal with Liberty Media not been struck, Sirius XM likely would have filed for Chapter 11 bankruptcy as early as today — and contracts with marquee talent like Howard Stern and Martha Stewart might be in jeopardy. Since bankruptcy has been avoided, Sirius CEO Mel Karmazin will keep his post atop the company. "Liberty's investment is an important validation of what Sirius XM has already achieved and a vote of confidence in what we will achieve," Karmazin said. "This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM."

Technology company Echostar was initially in talks to take over Sirius XM (Echostar bought up a chunk of Sirius XM's debt), but Karmazin and EchoStar chief executive Charlie Ergen couldn't agree to terms on a deal that would hand the reins to EchoStar.

Related Stories:

• Sirius XM Reportedly Preparing To File For Bankruptcy
• Sirius XM Plans Rate Increase As Stock Continues to Decrease
• Satellite Radio Listeners Rankled By XM-Sirius Merger

To read the new issue of Rolling Stone online, plus the entire RS archive: Click Here

prev
Duff McKagan Opens Up About Guns n' Roses, Punk Band Loaded and Steven Adler
Music Main Next
Taylor Swift: The Story Behind Rolling Stone's Cover Story

Picks From Around the Web


blog comments powered by Disqus

Featured News From vulture vulture

Daily Newsletter

Get the latest RS news in your inbox.

Sign up to receive the Rolling Stone newsletter and special offers from RS and its
marketing partners.

X

We may use your e-mail address to send you the newsletter and offers that may interest you, on behalf of Rolling Stone and its partners. For more information please read our Privacy Policy.

Most Popular

Photos & Videos

Go To Content

Random Notes: Hottest Rock Pictures

Go To Content Play Video

Video: Metallica, 'Hit the Lights' Live at Orion

Go To Content

Gallery: Readers' Poll: The 10 Greatest Rock & Roll Rebels

Best Ever Lists
100 Greatest Guitarists

Other Lists

Song Stories

“Everyday People”

Sly and the Family Stone | 1968

"Everyday People" managed to trailblaze in two different ways -- it was one of the first pop hits to deal with the subject of racial harmony, and it utilized Larry Graham's "slap" technique on the bass guitar, which would soon be copied by countless other bassists. Graham once said about his pulsating style, "I'd never done that before … that's where the freedom of creativity came in for the band, that we'd be allowed to do that." In 1978, the song's line "Different strokes for different folks" would be borrowed for the title of the hit television show Diff'rent Strokes.

More Song Stories entries »