Englewood, Colo. - SiriusXM is
opposing a request by Liberty Media to take de facto control of the satellite
broadcaster, potentially leading to the departure of SiriusXM CEO Mel Karmazin
and possible new marketing directions.
Liberty received preferred stock
convertible to 40 percent of SiriusXM stock as part of its $530 million investment
to rescue SiriusXM from bankruptcy in 2009. The Federal Communications
Commission (FCC) consented to the deal once Liberty declared that it was not
taking de facto control of SiriusXM and said that the investment deal
stipulated a three-year moratorium on any Liberty effort to take de facto
control. That moratorium ended March 6, 2012.
Under the 2009 deal, Liberty was
limited to choosing five of the board's 13 members, but if Liberty converts its
preferred stock to common stock, it would be able to vote for all board
members. Liberty would be SiriusXM's single largest common-stock shareholder.
No other shareholder owns 5 percent or more of SiriusXM stock, Liberty said.
Under the moratorium, Liberty
also agreed not to initiate stockholder proposals, influence or control
management and directors, or buy stock to acquire more than 49.9 percent of
SiriusXM common stock. Liberty said it doesn't plan to exercise those rights
while it awaits FCC approval.
Since the investment, SiriusXM
has turned profitable, its subscriber base is growing, and its stock price has
In a past investors' conference
call, SiriusXM CEO Mel Karmazin said, "I'm not really good at working for somebody."
Liberty Media owns Starz, the
Atlanta Braves and TruePosition, a maker of E911 products for the cellular
industry. It purchased more than 40 percent of DirecTV in 2008, and it also has
ownership stakes in Barnes & Noble, Live Nation Entertainment.
Englewood, Colo. - SiriusXM is opposing a request by Liberty Media to take de facto control of the satellite broadcaster, potentially leading to the departure of SiriusXM CEO Mel Karmazin and possible new marketing directions.