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Liberty Interactive Corporation Message Board

  • ezalldee ezalldee Feb 3, 2011 10:05 AM Flag

    SIRI master plan? Could be.

    I've been around these parts for 17-years and this sure makes sence.

    People with knowledge of Liberty Media say Malone and Maffei believe they're investing in a vastly undervalued asset. Malone, a billionaire media maven, for years has been enamored with satellite, which he considers a cheaper alternative to cable TV and phone service. Under his agreement with Sirius, Malone's company will invest up to $530 million and could take a 40% stake in the company, though it is blocked for three years from taking a stake larger than 49.9%. That could give Malone, who joins the Sirius board along with Maffei, the time he needs to make Sirius a working part of larger satellite ambitions.

    Malone, a Yale-educated engineering PhD, hasn't said what those ambitions are, but he has a reputation for thinking several steps ahead of his peers. "If there is something to make out of all of this, John Malone probably has it figured out already," says Jimmy Schaeffler, chief executive officer of the digital consulting firm Carmel Group. For starters, Malone's Liberty Entertainment unit owns a 48% stake in DirecTV (DTV), the nation's largest satellite TV operator, with 17.6 million subscribers. DirectTV already offers music from the Sirius XM service, but it could market the products to customers for use in their cars at a fraction of the current $12.95 monthly subscription fee for Sirius XM. Liberty could also harness unused satellite spectrum controlled by Sirius XM to offer more channels of video.

    An equally intriguing prospect is how Sirius might fit with Liberty's 37% stake in WildBlue Communications, which offers wireless broadband for $49.95 a month to mostly rural customers who can't get high-speed Internet access from a local phone company. The service currently has 380,000 subscribers, a 10% increase in the last six months, but could likely do much better if it was marketed alongside Sirius radio.

    Down the road, Liberty and Sirius XM are likely to weigh combining operations, says Larry Rosin, president of Edison Media Research . "I assume that they are going to eventually talk about a merger," Rosin says. Rating :