Sirius XM Doubles Up on Sports to Sack More Revenue 71 comments
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You love baseball, but your car came with Sirius. You love football, but have always been an XM subscriber. These are problems of the past as Sirius and XM have now merged to form Sirius XM Radio.
When people think of merger synergies, they tend to think of cost savings that are derived from items such as the elimination of duplicate functions, savings on advertising, or savings in customer service and billing. Some synergies have potential to add revenue, and for investors, the fact that these types of added revenues seem to be getting overlooked could be a positive on the equity.
We covered one obvious revenue stream in Howard Stern, who as the King of All Media, suddenly finds himself with an expanded audience by the addition of XM subscribers that will soon be able to get Stern's program. The next obvious crossover programming would be sports.
Major League Baseball is right now in the midst of a pennant race, and the National Football League is just now ramping up. The timing of the merger from a sports perspective could not be better. XM has every MLB game, Sirius has every NFL game… SIRIUS XM Radio will be able to offer crossover programming in the form of “Best Of”. Best Of will allow existing subscribers to get some of the best from what used to be the other service. The fee for accessing the crossover programming… only $4.04 per month.
Don’t look for a full crossover on sports, but rather selected games. There simply is not enough bandwidth to deliver all of the games to each respective subscriber base on a crossover basis, but there should be a good selection of popular games that give Sirius subscribers access to baseball, and XM subscribers access to football.
So, will the baseball playoffs and the World Series be available to Sirius subscribers? I would venture to say that Mel Karmazin has that as a goal. Will opening kick-offs from the NFL be on XM? Again, I think that popular games are in Mel’s game-plan.
Baseball and Football are the obvious sports crossovers, but potential exists for NASCAR (The Sprint Races), college sports, the NBA, Soccer, and perhaps even the NHL, although the NHL rights were paid for in part by XM Canada, which is a separate entity from Sirius Canada.
What kind of revenues will crossover sports bring? If 1,000,000 subscribers decide to add the crossover programming, SIRIUS XM Radio can realize a bit over $4,000,000 per month in new found revenue. Ad dollars would likely increase as well, as the audience is expanding, and the reach is that much greater. While $4,000,000 may not seem like much, it is “found money”, and will help deliver better cash flow for the company as it moves forward.
Look for new details to be rolled out over the coming weeks on Best Of programming. Karmazin has indicated that news will begin to roll in after Labor Day (September 1st).
Position - Long SIRI, Red Sox, and Patriots
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This article has 71 comments:
You heard wrong Neal. 1 year not 3.
Long Sox... Long Pats...
Position long: Giants/ yankees
Long-Siri
You also have to realize the auto industry is just as much of a bureacracy as the folks in washington...
(and the combined sports programming is the future of satelite radio - the regular radio stations are already feeling the hurt from ipods, CD's and MP3's and now internet radio - sorry, music and regular news will not make satelite a winner. It will be sports first, news/traffic-for integration with gps, and special interest talk last that will make this a winner)
now im angry because my old navy boots are worth more than my sirius investment and ma' is gona pull me by the ear
tyler help me! like youve helped ALL your investors on this board (heeheehee)
i aint no white trash, its just that my purpose in life is meaningless as is my sirius investment but ya'll dont ya dare blame TYLER cuz youre down SO MUCH, he didnt tell you to buy even though he wrote 100 articles pumping it to us daily over and over go blue dog run like my mama!
hes gona write more articles, pull 'research' off the internet and repost big-time price targets, so dont you worry ya'll down so much and down almost evrything cuz TYLER IS NOT TO BLAME EVEN THOUGH YA'LL DOWN 90%
back on the farm, the sun dont shine cuz lota horse manure i step on and thats worse than being down biggggggggg timeeeeeeeee on sirius! run blue dog run before i stick my carrot in your hole like the sheep i b' a chilling wiff at night =)
run blue dog run like my mama!
go blue dog mama!
Secondly, all shares related to the XM notes have been lent to JP Morgan, Morgan Stanley and UBS who are the institutions handling the offering for XM, a owned subsidiary of Sirius XM radio. The shares lent were priced at $1.50 / share to the institutions for resale concurrently when the notes are sold for what is referred to as "convertible arbitrage". Essentially this represents the buyers of the notes having the "option" to "Short" the underlying security, stock. This being a Private transaction available only to qualified institutions, the stock is not part of the company's "Float" or "EPS" metric. according to GAAP standards. The note converts at a rate of 1.87 per share if the note's owners wish to convert at maturity. The value of these shares will be the difference between the open market value and the 1.87 price paid. This is what makes them attractive along with the % rate paid to owners while they wait. The $1.87 represents roughly 534 shares of SIRI for every $1,000 invested in the notes. This also has nothing to do with the "Lent" Shares. The interest rate on the notes is paid twice per year, representing income to the note's owners during the period of maturity, and shows up as a part of interest expense on the company's 10Q and annual reports. These shares "Lent" are come back to Sirius XM on or about the same time the Notes mature, which is another reason they are not part of the "Float". Sirius XM Radio does not receive any monies from the transaction, $.001 / share from the institutions being lent the shares, a nominal one time fee.
DO YOU HAVE HOT GOATEE LIKE TYLER HUH MILJANJS!? RUN BLUE MAMA RUN!
miljanjs:
I maybe new to the market, but my average cost for my SIRI is only 1.68, cause I looked at the cap and figgered ain't worth 4 bucks - so didn't buy - even when the talk was a pop to 5 on the merger approval.
Tyler is a writer with an opinion. Thats it. He has no effect on the market, on the stock, or the management of the company. More importantly, he is not the owner of your portfoliio, you are. The only loser is the one who has nothing better to do than sit around here and type with the CAPS LOCK on. I know a few guys just like you. They are all lonely useless individuals.
to a good radio sportscaster on radio during the game.
Besides who carrys a dish satelitte TV around with them
when they are on the move. Receiving content while
mobile just about anywhere and anytime is part of the idea here.
I didnt get F'd on anything. I bought a on more in the past 2 weeks. Im already making money on it.
tylenol_sirius, your the fabricator of facts, you only true belief is in revisionist history.
That is not to say that I don't appreciated Tyler's work on keeping me informed about the latest news and goings on at Sirius. Because I do appreciate the information and detail provided. In doing MY OWN research I know how accurate it helpful it is.
Long Sirius XM.
pos. long sirixm
Thnx for the link i'll look for it.
So do ya'll think Siri will spike up after labor day? If so what do ya'll think it will run up to?
Eventually i want to go long term investment's but for right now "as a poor person" i'm trying to play the market and make a lil money here and there and build up till i get a certain amount of money. I will say this, since i started trading on etrade in July this is rather addicting and can see i had better watch myself.
And thanks to the contributors who take this seriously and help us (especially me) understand the complexities of this market.
I'm addicted to this trading stuff and i'm only allowed around $200 a month to play around and just started around July 1st..............is there a STOCK MARKET ADDICTION GROUP............. LOL