Now DirecTV is reportedly entering talks with Sirius XM, possibly touching off a bidding war over the satellite-radio company between the two leading satellite TV companies.
The New York Times reported that Liberty Media, controlled by John Malone, which has a controlling interest in DirecTV, is in preliminary talks with Sirius XM, painting a scenario where both DirecTV and Dish Network CEO Charlie Ergen are vying for control of Sirius.
Frankly, I’m exhausted from following the rumor trail, and so Feb. 17, the day of reckoning, can’t come soon enough. At that time, the first of three key debt payments owed by Sirius this year come due. The first $175 million payment this month is reportedly owed to Ergen, who could force the hand of Sirius CEO Mel Karmazin to cede control of his company or to file for Chapter 11.
This last is a fate that might be good for trimming the fat off Sirius’ inflated expenses, and freeing up the company to focus on delivering great radio instead of scrambling to pay off debt, but reorganization is not so good for skittish subscribers who might abandon the service.
If you want to unravel the choices keeping Karmazin up at night, check out a convincing article in The Motley Fool. But it’s only background at best, because if Liberty Media is now in the picture, the plot has already thickened.