SIRIUS XM Reaches 20 Million Subscribers

NEW YORK, Nov. 30, 2010 /PRNewswire/ — SIRIUS XM Radio (Nasdaq: SIRI) today announced that it recently surpassed 20 million subscribers, a record number of subscribers in satellite radio history.

Mel Karmazin, SIRIUS XM’s Chief Executive Officer, stated, “Reaching and surpassing 20 million subscribers is a significant milestone for us. We have added the last 10 million subscribers faster than the first 10 million — despite a tremendously competitive environment — representing a strong endorsement of our service and our programming by discerning consumers who want and demand the best in audio entertainment. As a leader in audio entertainment, SIRIUS XM has assembled the best content, personalities, and entertainers that satisfy our subscribers’ diverse interests.”
In celebration of this milestone, SIRIUS XM previously announced a special, subscriber-only broadcast of an exclusive Paul McCartney concert at the Apollo Theater in New York City on December 13, 2010.

About SIRIUS XM Radio
SIRIUS XM is America’s satellite radio company, broadcasting more than 135 channels of commercial-free music, and premier sports, news, talk, entertainment, traffic, weather, and data services to 20 million subscribers in cars, trucks, boats and aircraft, and through a wide range of mobile devices.

SIRIUS XM offers an array of content from some of the biggest names in entertainment, as well as from professional sports leagues, major colleges, and national news and talk providers. SIRIUS XM programming is also available at sirius.com and xmradio.com, and on Apple iPhone and iPod touch, BlackBerry and Android-powered mobile devices using the SIRIUS XM Premium Online App.
SIRIUS XM has arrangements with every major automaker and its radio products are available at retail locations nationwide, as well as shop.sirius.com and shop.xmradio.com.

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, the combined company’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of SIRIUS XM’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the control of SIRIUS and XM. Actual results may differ materially from the results anticipated in these forward-looking statements.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statement: our dependence upon automakers and other third parties, the substantial indebtedness of SIRIUS and XM; the useful life of our satellites; and our competitive position versus other forms of audio and video entertainment. Additional factors that could cause SIRIUS’ and XM’s results to differ materially from those described in the forward-looking statements can be found in SIRIUS’ Annual Report on Form 10-K for the year ended December 31, 2009 and its Quarterly Report on Form 10-Q for the period ending September 30, 2010 and XM’s Annual Report on Form 10-K for the year ended December 31, 2009 and its Quarterly Report on Form 10-Q for the period ending September 30, 2010, which are filed with the Securities and Exchange Commission (the “SEC”) and available at the SEC’s Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and SIRIUS and XM disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this communication.

Liberty will be loaning Sirius XM $280 million with a 15% interest rate.  Sirius will have to pay back Liberty Media the money by December 2012.  Another part of the deal is a $150 million loan to XM radio for help in paying back Echostar, a satellite TV company.  Echostar had expressed interest in acquiring Sirius XM at one point as well.  Liberty also pledged to loan another $100 million to help pay for Sirius XM’s existing loans.

Once all of the loans are made, Liberty Media will get 12.5 million preferred stock shares in the satellite radio company.  Liberty will also have 40% of the seats on Sirius XM’s board of directors.

“We are pleased to have come to this agreement with Liberty Media, particularly in light of today’s challenging credit markets,” stated Sirius XM CEO Mel Karmazin. “Liberty’s investment is an important validation of what Sirius XM has already achieved and a vote of confidence in what we will achieve.  This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM. By strengthening our capital structure and enhancing our financial flexibility, this investment allows us to continue providing the great content and innovative programming our subscribers know and love.”

Sirius is now hiring advisers in preparation for a possible bankruptcy according to sources at the NYT.  This is bad news for celebrities who currently depend on Sirius XM to broadcast content such as Eminem’s Shade45 and Howard Stern.  A bankruptcy may cause Sirius XM to cancel contracts with celebrities.

If Sirius goes bankrupt, it would be the second largest Chapter 11 of the year.  The company has $5 billion in assets including the satellite technologies.  That is shortly behind Smurfit-Stone, a company with $7 billion in assets.  Sirius XM has never seen a profit even when both companies were independent of each other.  Now they have $3.25 billion in debt.

The automotive industry taking a hit has a direct correlation with Sirius’ failure.  Many of the new cars on the market are Sirius XM-ready.  If consumers aren’t buying them, they won’t have access to the satellite radio unless buying the peripheral device.

“Sirius XM hired Joseph A. Bondi of Alvarez & Marsal and Mark J. Thompson, a bankruptcy lawyer with Simpson, Thacher & Bartlett, to help prepare a Chapter 11 filing,” stated the NYT.  “Documents and analysis are close to completion and a filing could come in days.”

EchoStar, a TV company may end up pushing the takeover Sirius as they already have bought some of the satellite radio company’s debt at $400 million worth.  Once Pulse 2.0 finds out more, we’ll report it in the coming weeks.

For more information, check out the discussion on Techmeme.