By Steve Garcia
Looking at Liberty Media, and all its diverse holdings, I have been unabashedly excited at what I have found as it relates to SIRIUS XM (SIRI). There are many both fundamental and speculative reasons to be excited at this strategic partnership. Whether it be DirecTV (DTV), Wild Blue, Zoombak, mobile streams or any of the other Liberty Media holdings, one can’t help but wonder what is to come. Especially, as a fan of Sirius XM Radio. Though these things alone are enough to get any true fan daydreaming about the possibilities, there may be more to what is going on and in play than meets the eye.
With the APPLE (AAPL) OS 3 application just days from release, and with Sirius recently commenting on its Apple application coming before the end of the 2nd quarter, things are looking up. The iPhone app will undoubtedly be a player with Internet radio from a global perspective. It appears that things are also looking global for Sirius XM. To that end, let me bring to focus another piece of John Malone’s global empire, Liberty Global (LBTYA, LBTYB, LBTYK).
Liberty Global, Inc. (“Liberty Global”) is the leading international cable operator offering advanced video, telephone, and broadband internet services. We operate broadband communications networks in 15 countries principally located in Europe, Japan, Chile, and Australia. Liberty Global’s operations also include significant media and programming businesses such as Chellomedia in Europe, as well as interests in content businesses in each of our regional markets.
Through the efforts of 22,000 employees worldwide, Liberty Global connects 16.9 million customers to the world of information, communications, and entertainment. As of March 31, 2009, Liberty Global’s networks passed more than 34.0 million homes and served more than 26.0 million RGUs, including approximately 15.5 million video subscribers, of which 6.8 million were digital cable and DTH subscribers, 6.3 million broadband internet subscribers, and 4.8 million voice subscribers.
• Active in Europe (UPC Broadband, Telenet, Chellomedia), The Americas (VTR, Liberty Puerto Rico) and Asia Pacific (J:COM, Austar)
It would seem that Sirius XM is not just a taker, but also a giver to the Liberty companies and John Malone. They get exclusive content and can leverage it over multiple possibilities….which I am sure was part of the justification for the agreed investment stake just when Sirius outwardly appeared to be imploding. Liberty Global has a large subscription base already…just like Sirius, giving that base a potential purchase option of exclusive subscription programming can only help.
In addition, the iPhone app just might be a lot more important than we think. It seems that this all is coming together like a puzzle of a thousand pieces that is turning into global expansion without the hurdle of Spectrum licensing that is so expensive and difficult to procure.
As I close let me just say that there is a lot more to what is unspoken, than to what is constantly rehashed over and over again in the mainstream media. Jim Cramer stated that Sirius' stock was worthless. This is probably not something he should read. It would make too much sense….and who wants to deal with that?
Position: Long SIRI.