On May 1st, speaking at the Sirius-XM results, CEO Mel Karmazin suggested that main shareholder Liberty Media’s 40 per cent holding in Sirius-XM “wasn’t the new 50!” It was light-hearted throw-away comment on Liberty’s attempt to persuade the FCC to permit Sirius-XM’s valuable transmission licences to be re-allocated to Liberty.
Perhaps Karmazin spoke just a day or so too soon, given that Liberty Media was at almost the same time accumulating Sirius-XM stock, and in an SEC statement last week confirmed that it now owned 45.2 per cent of Sirius, having secured contracts to buy the extra 5+ percent by paying $650 million for 302 million shares.
Liberty Media had previously requested that the FCC recognise that its – then – 40 per cent holding, plus the 5 out of 13 seats on Sirius-XM’s board gave it de-facto control over the pay-radio broadcaster.
Liberty Media is now expected to return to the FCC with an amended request to reconsider its decision by June 4th. There’s a Sirius-XM shareholder’s meeting scheduled for May 22nd.
Liberty’s CEO Greg Maffei expressed his view of the situation, implying that he’d be quite happy to spend more: “As far as de-facto control, my layman’s understanding would be we have a certain series of rights by contract with Sirius-XM. To be able to fully exercise those rights freely, we need to have de-facto control approved by the FCC. And as far as changing our application, I think there are host of things, actions we might take including this action we have taken, which will have bearing on our application and we’ll weigh those, as we said, over the next 30 days and decide how to amend.”