Now, these overgrown contracts loom large in a new era where Sirius XM is a satellite radio monopoly and subscriber growth is flattening.
Sirius XM has said it expects to cut about $60 million from its programming costs this year, largely through the reduction of duplicate radio channels. The company has also been working with its contract partners to ease the terms of some of the pricey deals.
Investors expect to hear an update on those talks from the company when it reports earnings in the coming weeks. Sirius XM may also offer another prediction on when it might reach an adjusted break-even point on cash flow.
A Sirius XM representative had no comment on contract talks. A Major League Baseball rep was not immediately available for comment Tuesday.Meanwhile, car sales, the primary source of new satellite radio subscribers, have dropped dramatically. Auto partners such as GM (GM) and Chrysler have their own set of problems and are looking for government aid to keep their operations intact. And radios at stores like Best Buy (BBY) and Wal-Mart (WMT) haven't exactly been flying off the shelves amid a consumer spending slump. Sirius XM may have dodged delinquency today, but there could be even more last minute rescues ahead. For now, shareholders were feeling a little more secure. Sirius rose 6 cents, or 52.5%, to 16 cents.
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