WorldSpace Inc fka WRSPQ

[bepop12345]

Liberty Media and Sirius XM Partnership or Content Agreement?

March 15, 2010

By Steve Garcia
With the filed petition through the International Bureau of the FCC by Liberty Satellite Radio to take possession of Worldspace’s Afristar 1 and 2 satellites, it appears the end to the bankruptcy proceedings regarding Worldspace will be upon us fairly soon. Liberty Satellite Radio is the actual filer with agreement from Worldspace of the petition. As discussed previously in earlier articles, Liberty Satellite Radio is a holding company for Liberty Media.
The next big question is will Sirius XM be a partner or a content provider to Liberty? If it were all about fair and equal, one would expect Sirius XM to become a 40% partner in any new venture from Liberty, since they received 40% of Sirius XM for essentially a short term bridge loan. That loan was paid back to Liberty in very short order, and had many shareholders up in arms, for some pretty fair reasons. However that is ancient history, and we know that business can sometimes be ruthless in its conduct.
 It is more than reasonable to speculate that Liberty is planning on starting up a satellite radio service with global implications and exclusive content. Part of that content will be native language programming for any countries that grant permission for Liberty to broadcast. Undoubtedly another large part of the situation will involve music, which certainly Sirius XM could provide. But Sirius XM can provide much more, like OEM relationships, and other exclusive content. Additionally, there is the technology and licensing on the XM side, which was granted by Worldspace several years ago to XM, and whatever improvements have been made upon it. Looking at it from the outside as an investor, I would hope that Liberty would enter into a partnership with Sirius XM. This would enable both companies to realize even greater leverage and cost reductions across their respective infrastructures with regard to satellite radio.
Of course, it’s just me, a writer who loves the service and has invested in it talking; but imagine if both companies shared the cost of satellites and launches. The ground control facilities, billing departments, the list goes on and on with regard to the cost savings that would come. What would the potential value of these two companies be then? I know one thing for sure; if I am thinking along these lines then surely some of the folks at both Liberty and Sirius XM have already discussed it at length. The recent debt re finance which removes restrictive covenants seems to lend creedence to that fact.
A tight lid has been kept on the flow of information regarding what the next step is, but in the interim, Sirius XM is setting itself up to handle its existing debt load in a more manageable fashion, and appears to be moving toward a more complete merger on paper. As the search for information keeps us alert, and our appetites wet, we can look forward to higher lows and higher highs in the future of this strengthening equity. Expect some negative press this week regarding failure to maintain minimum price for the NASDAQ Global market. However, that is a temporary situation which appears to be correcting itself already with Friday’s press release regarding quarterly reranking of the NASDAQ Q-50 and Sirius XM joining that index as of March 22, 2010. So folks, good times coming, we just need to ignore the nonsense that will be thrown out there in the interim.
 http://www.kingofalltrades.com/
Disclosure; Long Sirius XM, currently hold no position in Liberty Media