FCC Approves Liberty Media Control of Sirius XM Licenses $SIRI
Let the short covering begin.
http://www.bloomberg.com/news/2013-01-03/fcc-...cmpid=yhoo
By Todd Shields - Jan 3, 2013 1:16 PM MT
John Malone’s Liberty Media Corp. won U.S. regulatory approval to assume broadcast licenses from Sirius XM Radio Inc. (SIRI), a step needed for Liberty to finish its takeover of the satellite radio provider .
The Federal Communications Commission in a posting today on its website said it approved the transfer of control of licenses to Liberty, which in March told the agency it was seeking control of New York-based Sirius.
Sirius uses satellites licensed by the FCC, and approval by the agency is a prerequisite for asserting control, Liberty has said.
Today’s approval by the FCC is a step in the transition from Mel Karmazin, 69, who took over at Sirius in 2004 after quitting as president of Viacom Inc. (VIAB) Four years later, he guided Sirius to its merger with XM Satellite Radio, combining the two pay-radio providers just before a slump in U.S. auto sales cut demand for pre-installed radios in cars.
After clashing with Malone, Karmazin in October said he would quit as chief executive officer and Sirius last month named James E. Meyer as interim chief while it seeks a replacement.
Malone, 71, helped Sirius avoid bankruptcy in 2009, lending the company $530 million. That deal earned Liberty billions, gave it a 40 percent stake in Sirius and put Malone on a path to control.
Taking Control
Liberty in filings said it will convert preferred securities and buy enough shares to own more than 50 percent of Sirius common stock within 60 days of gaining approval for the license transfers, the FCC said in today’s order.
Sirius has 23.4 million subscribers and became a profitable company in 2010 after more than a decade of losses. It has satellite radios installed in about two-thirds of all new automobiles.
Liberty Media fell 32 cents to $119.47 at 2:41 p.m. New York time in Nasdaq Stock Market trading, and Sirius rose 6 cents to $3.08.
Before the
Federal Communications Commission Washington, D.C. 20554
In the Matter of ) )
Sirius XM Radio, Inc., Transferor
) IB Docket No. 12-282
1. In this Order, we consider a series of applications (collectively, the “Application”) filed by Liberty Media Corporation (“Liberty Media”) pursuant to section 310 of the Communications Act of 1934, as amended (“Communications Act”) and the Commission’s rules,1 seeking approval to transfer de jure control of the licenses and authorizations held or controlled by Sirius XM Radio, Inc. and its subsidiaries (collectively “Sirius”) to Liberty Media.2 Based on the record established in this proceeding,
1 47 U.S.C. § 310(d); 47 C.F.R. § 25.119(d).
2 See Liberty Media Corporation, Application for Consent to Transfer of De Jure Control of Sirius XM Radio Inc., Narrative, IBFS File Nos. SAT-T/C-20120817-00133, -00134, -00135, -00136, SES-T/C-20120821-00776, -00777, -00792 (filed Aug. 17 and 21, 2012 respectively) (“Narrative”). Liberty also filed applications seeking consent with respect to Wireless Telecommunication Bureau licenses, ULS File Nos. 0005353974, 0005353880 (filed August 17, 2012) and Experimental License File Nos. 0019-EX-TU-2012, 0020-EX-TU-2012 (filed Aug. 16, 2012). These applications will be acted on contemporaneously with this Order by the Wireless Telecommunication Bureau and the Office of Engineering and Technology. A complete list of applications is included in the Appendix. Previously, on March 20, 2012, Liberty Media filed a series of applications seeking Commission consent to the transfer of de facto control of Sirius to Liberty Media. Liberty Media Corporation, Application for Consent to Transfer of De Facto Control of Sirius XM Radio Inc., IBFS File Nos. SES-STA-20120320-00280, -00281, and -00282; SAT-STA-20120320-00054, -00055, -00056; Experimental License File Nos. 0007-EX-TC-2012, 0008-EX-TC- 2012, 0009-EX-TC-2012 (filed Mar. 20, 2012). The Commission dismissed the applications in letters dated May 4, 2012 and May 10, 2012. Letter from Roderick Porter, Deputy Chief, International Bureau and Julius Knapp, Chief Engineer, Office of Engineering and Technology, to Robert L. Hoegle, Counsel for Liberty Media (May 4, 2012); Notice of Dismissal, Wireless Telecommunications Bureau, Reference Nos. 5370148, 5370149 (May 10, 2012). Liberty Media sought reconsideration of these actions, but withdrew that request contemporaneously with the filing of the Application. Liberty Media Corporation, Petition for Reconsideration of Dismissal of Applications for Consent to Transfer of De Facto Control, IBFS File Nos. SES-STA-20120320-00280, -00281, and -00282; SAT-STA-20120320-00054, -00055, -00056; Experimental License File Nos. 0007-EX-TC-2012, 0008-EX-TC- 2012, 0009-EX-TC-2012 (filed May 30, 2012).
?
Federal Communications Commission DA 12-2067
?we find that grant of the Application will serve the public interest, convenience, and necessity.
II. BACKGROUND
A. Description of the Parties
1. Sirius XM Corporation
2. Sirius, a publicly traded company incorporated under the laws of Delaware, provides music, sports, talk and entertainment and news and information programming via two satellite radio systems – the Sirius system and the XM system.3 Currently, Sirius owns and operates eight satellites, and holds earth station, wireless and experimental licenses.4 As of November 1, 2012, Sirius had over 23 million subscribers.5
2. Liberty Media Corporation
3. Liberty Media, a publicly traded company incorporated under the laws of Delaware, holds ownership interests in a variety of businesses. Liberty Media’s consolidated, wholly owned subsidiaries include Starz, LLC, which provides subscription video programming to U.S. multichannel video programming distributors, including cable operators, satellite television providers and telecommunications companies. Starz, LLC, also provides subscription video programming to the Atlanta National League Baseball Club, Inc., which owns and operates the Atlanta Braves Major League Baseball franchise; and, TruePosition, Inc., which develops and markets technology for locating wireless phones and wireless devices.6 Liberty Media has announced that it intends to consummate a spinoff transaction on January 11, 2013, in which Starz, LLC will become a stand-alone publicly traded corporation with the other businesses of Liberty Media being held in a separate, publicly traded corporation.7 Dr. John C. Malone, Chairman of the Board of Liberty Media, beneficially owns shares representing the power to direct approximately 42% of Liberty Media’s aggregate voting power.8
B. Description of the Transaction
4. Liberty Media proposes to acquire de jure control of Sirius. When Liberty Media filed the Application it held 12,500,000 Series B-1 Preferred Shares, convertible into common stock representing approximately 40% of the total outstanding shares of Sirius (on an as-converted basis).9 Based on the preferred shares and other common stock shareholdings held by Liberty Media at the time of filing, Liberty Media stated that it owned the equivalent of 47.3% of the total outstanding common shares of
3 Narrative at 8-9.
4 Id.
5 Sirius XM Radio Inc., Quarterly Report (Form 10-Q), at 3 (Nov. 1, 2012). 6 Narrative at 5-6.
7 On December 19, 2012, Liberty Media filed a supplement to its Application stating that it has formed Liberty Spinco, Inc. (“Spinco”) which will own all of the businesses, assets and liabilities of Liberty Media not associated with Starz, LLC. Spinco will be owned by the shareholders of Liberty Media, in the same proportions, and with the same officers and directors. Upon consummation of the transaction, Spinco will be renamed Liberty Media Corporation and the entity currently known as Liberty Media Corporation will be renamed Starz. Liberty Media Corporation, Supplement to Liberty Media Corporation’s Applications for Consent to Transfer Control, IB Docket No. 12-282 (filed Dec. 19, 2012) (“Liberty Supplement”). Liberty noted its plans for the Starz, LLC spinoff in its May 2012 application. Narrative at 5, n.5.
8 Liberty Supplement at 2. 9 Narrative at 2.
?2
Federal Communications Commission DA 12-2067
?Sirius stock on an as-converted basis.10 Liberty Media stated that within 60 days of Commission consent of transfer of control it will purchase sufficient additional shares of Sirius’ common stock and will convert its Preferred Shares so that it will own more than 50% of the outstanding shares of common stock of Sirius.11 Liberty Media has since converted slightly less than half of its Series B-1 Preferred Shares to common shares and purchased additional common shares of Sirius XM.12 Liberty indicates that the conversion of its remaining preferred stock, and the exchange of senior subordinated notes for common stock, will result in Liberty Media owning approximately 49.5% of Sirius’s outstanding common stock.13 Liberty states that it will purchase sufficient additional shares in the open market and convert remaining preferred shares to own 50% of Sirius XM common stock, upon the Commission’s consent to its acquisition of control.14 (posted by Mt.BigSky)
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