The AP is reporting that Liberty Media, who had previously expressed interest in Sirius-XM, has signed a deal where it’ll invest $350 million in the failing satellite radio company. This comes right in the nick of time; Sirius had $175 million in bond payments due today, which would have no doubt sent the company into Chapter 11 bankruptcy. Instead, Liberty Media is going to get 12.5 million shares of convertible preferred stock, worth about 40 percent of the company’s common stock. Additionally, two seats on the board will go to Liberty Media, giving it quite a bit of control over the company.
As for current CEO Mel Karmazin, it’s only a matter of time before he’s outta there. Since the merger between Sirius and XM, Karmazin has failed to have the company turn a profit, leading to a lack of investor confidence and a couple close scares. Let’s hope that Liberty Media can stop Sirius-XM from bleeding cash; especially from that $500 million Howard Stern deal. Shareholders, you can breathe a little easier today.