The news came during Liberty's fourth-quarter earnings conference call, where CEO Greg Maffei said that while bundling the services of DirecTV and Sirius XM may be an "opportunity down the road," the company is not planning to combine the operations together.
Liberty Media controls DirecTV, the nation's leading satellite-TV operator and rival of Dish Network (DISH).
Just over a week ago, Liberty helped save Sirius XM from a potential bankruptcy filing with a $530 million loan infusion giving billionaire John Malone's company a 40% stake in the satellite radio giant. EchoStar (SATS) had also reportedly been trying to gain control of Sirius XM, going as far as to accumulate a large amount of Sirius XM's debt.EchoStar, which sells set-top boxes and was the former parent of Dish Network, is controlled by Charles Ergen. Ergen had offered to restructure Sirius XM's debt and inject several hundred million dollars of capital into the company in return for control, according to several media reports. Maffei added that Liberty's investment in Sirius XM was driven by the appeal of the satellite radio company's service and "the attractive terms of the securities." With credit markets still tight, Sirius agreed to pay a 15% interest rate on the Liberty Media loans in order to stave off Ergen and EchoStar's overtures. In exchange for the loan, Sirius will issue 12.5 million shares of preferred stock that will convert to a 40% stake in the company's common stock.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV