Sirius XM Radio – Joshua Weisleder

Posted on February 18, 2016 by smwarren

1221 Avenue of the Americas
New York, NY 10020

James E. Meyer | Chief Executive Officer, SiriusXM

Scott Greenstein | President and Chief Content Officer, SiriusXM

Dara Altman | Executive Vice President and Chief Administrative Officer, SiriusXM

About

SiriusXM delivers quality ad-free satellite radio programing to its subscribers ever since its early inception in Washington, DC in the early 90’s. The broadcasting company transmits satellite radio services like Sirius Satellite Radio, XM Satellite Radio and Sirius XM Radio anytime and and anywhere for its subscribers in North America. Users can access the service in their car, computer, and smartphone and tablet devices. Sirius also has constructed deals with every major automaker while also providing weather and traffic updates for automobiles, trucks, boats, RVs and aircrafts. In regards to content, Sirius offers musical stations from various genres and time periods, sporting entertainment from all major professional leagues and top notch talk show programming across its hundreds of channels. SiriusXM also allows users to individualize their content by using MYSXM which lets users listen to hours of on-demand programing so they will never miss a beat. In regards to revenue, SiriusXM is the biggest in the market and recently reached 30 million subscribers during its first quarter of 2016(1). The American based company also has a Canadian subsidiary called SiriusXM Canada, which has a user base of 2 million users.

New Programming

This past year, SiriusXM has added more quality programs to its already impressive collection of stations. Some of their new content includes SiriusXM NHL Network Radio, SiriusXM Comedy Greats, FOX News Headlines 24/7, Velvet (a vocalist curated station for the likes of John Legend and Adele), SiriusXM Fly (Hip/Hop and RnB from the 90’s and early 2000’s) and KIDZBOP Radio(2).

SiriusXM also schedules in limited time channels throughout the year to test out potential ratings or to celebrate particular events or musical artists. In anticipation for the acclaimed music festival, Sirius launched Coachella Radio on April 11 to feature music by artist that are scheduled to perform(3). Last January, recently after his death, Sirius added a commemorative David Bowie station on channel 30 to celebrate his legendary career(4). As well, with the recent passing of Prince, they created a station in his honor on channel 50(5).

This past march, SiriusXM provided all users access to every second of every game of the 2016 NCAA March Madness on their satellite radios and internet connected devices. They provided extensive coverage for both mens and women’s basketball with insight analysis from Mike Krzyzewski, Bobby Cremins, Tom Brennan, Steve Lappas and Mateen Cleaves(6). In addition, at the beginning of April, SiriusXM expanded its broadcasting coverage for Golfs biggest event, The Masters. There programing included commentary and hours of live play-by-play coverage from Augusta National(7). As well, Sirius will broadcast all the NBA and NHL playoff action this postseason while also providing MLB and NFL regular season and playoff games throughout the rest of 2016 and beyond.

Finances

Currently, Sirius XM Holdings Inc. has a share price of $3.96 on NASDAQ(8)

In 2015, the company recorded its highest revenue at $4.6 billion while having their Net Income reach $510 million(9). Their Net Subscriber base grew by 2.3 million in the previous year, which helped them propel to 30.1 total users in 2016. In addition, their EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization(10)) surged 13% to an all time high for the company by reaching $1.66 Billion at the end of 2015 which eclipsed its 2014 mark of $1.47 Billion. For 2016, the company projects a 1.4 million net subscriber increase, $4.9 Billion rise in revenue, an EDBITDA of roughly $1.78 Billion and a Free Cash flow of around $1.4 billion. In addition, highly regarded financial analysis and TV personality for Mad Money, Jim Cramer, publicly stated earlier in April that: “When you see a lot of cars being sold — and we have a remarkable number of cars being sold — you want to own Sirius(11).” With SiriusXM having market control of satellite radios with the main automobile manufactures, its safe to say that SiriusXM will continue to be profitable.

Howard Stern

The king of SiriusXM’s programing is unquestionably Howard Stern. He has two stations on the service, Howard 100 and Howard 101, attracts millions of listeners and has generated huge earning for the company. As the highest paid radio broadcaster in the country, there was speculation if Stern would leave SiriusXM to purse a new distribution medium like Apple Music or Netflix(12). However, he decided to renew his contract with SiriusXM last November to give him a 5 year $90 Million per year deal, which is an annual increase from his previous $80 million yearly salary. By locking him up, SiriusXM can ensure that there biggest star is happy and still an integral part of their growing business(13).

Broadcasting Partners

Despite having several fantastic musical stations, SiriusXM has established great partnerships with several sports, news and talk programming corporations. Some of their partners are BBC, Bloomberg Radio, CNBC, CNN, the Dave Ramsey Show, ESPN, NPR, Playboy, Radio Disney, and the Weather Network(14). By having a strong group of media corporations available for users within the Sirius ecosystem, it gives users tons of options to recieve quality news and talk.

Automobile Partnerships

With a major source of listenership generated from car owners, SiriusXM has partnered with almost every major car manufacture in the market. They have existing deals with Acura, Audi, BMW, Cadillac, Chevrolet, Dodge, Ford, Harley Davidson, Honda, Jeep, Kia, Lexus, Toyota, and many more manufacturers(15). By having SiriusXM accessible with both American and non-American automobiles and in both luxuries and more affordable cars, the company is allowing all drivers the opportunity to subscribe to their service and its setting themselves up to be the go to place for in car audio entertainment in North America.

Closing Statements

SiriusXM provides a service unmatched in the industry. Despite heavy competition in the streaming market, SiriusXM is the only provider of ad-free satellite radio with a multitude of stations to entertain any kind of listener. From your favorite pop songs on Hits 1 to breaking news on CNN, you have 100’s of channels to choose from. After following another successful fiscal year, locking up their biggest entertainment asset in Howard Stern and continuously locking down automobile partnerships, theres nothing slowing down the satellite radio giant.

Sources

Billboard – April 23rd, 2016
SiriusXM: Channel Update – April 23rd, 2016
SiriusXM: Investor Update – April 22nd, 2016
SiriusXM Blog: David Bowie – April 24th, 2016
SiriusXM Blog: Prince – April 24th, 2016
SiriusXM: Investor Update Golf – April 22nd, 2016
Marketwatch – April 23rd, 2016
SiriusXM Investor Update – April 22nd, 2016
SiriusXM 2015 Financial Report – April 15, 2016
Investopedia – April 24th, 2016
The Street – April 22nd, 2016
TechTimes – April 22nd, 2016
Today – April 23rd, 2016
SiriusXM Partners – April 24th, 2016
SiriusXM Automobile Partners – April 24th, 2016

Sirius XM Radio

Posted on November 3, 2013 by Stephanie Bronfein

By Stephanie Bronfein

The official SiriusXM logo, courtesy of siriusxm.com [1]

SiriusXM Satellite Radio

1221 Avenue of the Americas

New York, NY 10020

www.siriusxm.com

Social Media: Facebook, Twitter, Instagram, YouTube

History [2]:

SiriusXM Radio is one of the largest radio broadcast and subscription media companies in the United States that provides original content to 25.6 million subscribers. Their commercial-free programming covers a diverse range of music, sports, talk, entertainment, traffic and weather shows, with celebrity personalities such as Howard Stern, Oprah Winfrey, The Grateful Dead, Pearl Jam and Tiesto. While the most popular way that consumers experience SiriusXM Radio is through satellite radio in their cars, it is also available for the home or office and can be streamed through SiriusXM Radio’s website or through Apple and Android mobile applications.

Key Executives [3]:

James E. Meyer – CEO

Scott Greenstein – President & CCO

Dara Altman – Executive VP & CAO

David J. Frear – Executive VP & CFO

All photos courtesy of SiriusXM Radio. For more information on the company’s executives click here.

Financial Standing:

SiriusXM Stock Change from 11/12 to 11/13, courtesy of siriusxm.com [4].

With 36 million shares to its name, SiriusXM Radio’s stock value sits at $3.68, with a 52-week high of $4.18 and a 52-week low of $2.67 [4]. Since the third quarter of 2012, the recorded revenue has increased 11% to $962 million. The adjusted EBIDTA increased 21% to a new record of $296 million and free cash flow increased 26% to $245 million [5].

Liberty Media Takeover:

Liberty Media Logo, courtesy of forbes.com [9].

SiriusXM Radio shareholders finally spoke up this August about Liberty Media Corporation gaining control of over 50% of the company, which resulted in former Chief Executive Officer Mel Karmazin leaving the company, along with a string of other directors. In 2009, when SiriusXM Radio was considering filing for bankruptcy, John Malone of Liberty Media offered a $530 million investment to get the subscription satellite radio company back on its feet. This deal allotted 40% control over the company to Malone and included a three-year grace period where Malone could not acquire a controlling interest in SiriusXM Radio’s shares [6].

In light of this period’s expiration at the end of last year, SiriusXM Radio shareholders failed to find a loophole in the investment-agreement terms to prevent Malone from buying out the company, so he did just that. What’s more, Malone didn’t allow other shareholders to vote on the deal. This is the main contention that SiriusXM Radio shareholders have against Liberty Media. Shareholders even went as far as suing the SiriusXM Radio board of directors in Aug. 2012 for not creating a strong enough defense against the Liberty Media takeover in the original investment-agreement [7].

As of the end of August, SiriusXM Radio share value has increased more than 2,160% at $3.62 since the Liberty Media investment was made, where shares were valued at as low as $0.16 [7].

Liberty Media also holds controlling shares of the Atlanta Braves, Leisure Arts, Inc., MacNeil/Lehrer Productions and TruePosition, Inc [8].

SoundExchange Sues SiriusXM:

SoundExchange Logo, courtesy of forbes.com [10].

On Aug. 16th, SoundExchange filed a lawsuit against SiriusXM Radio for $50 to $100 million in damages, claiming that the radio provider underpaid artist royalties from 2007 to 2011 [12].

SoundExchange is an independent nonprofit organization that has been designated by the Copyright Royalty Board to collect digital performance royalties from statutory license users—such as SiriusXM Radio—for the purpose of distributing those royalties to the rightful copyright owners and artists. As the only Satellite Digital Audio Radio Service in the country, it has been decided by the Copyright Royalty Board that SiriusXM Radio should pay a federal statutory royalty rate to avoid penalty of copyright infringement for the public performance of sound recordings that they do not own (via transmitting them to their subscribers). This rate is applied to the gross revenue as defined by the Copyright Royalty Board, which was settled between 6-8% for the years of 2007 to 2012 [11].

At the root of the lawsuit, which is compromised of four different counts against SiriusXM Radio, is a claim that the gross revenue has been reduced without proper authorization from the Copyright Royalty Board, causing a multi-million dollar underpayment to SoundExchange [11]. Essentially, SiriusXM Radio has been cornered for their bad accounting.

From their reported gross revenue, SiriusXM Radio excluded revenue collected from pre-1972 sound recordings, incremental revenue on SiriusXM Radio’s premier subscription package and two additional subscription packages that include both music and talk programming [12]. On top of these three counts against SiriusXM Radio is a claim that they did not pay late fees to SoundExchange on time—in part due to the fact that they didn’t know that they apparently owed SoundExchange millions of dollars—and SoundExchange expects to collect interest on these late fees [13].

While copyright law does not protect pre-1972 sound recordings, the Copyright Royalty Board requires that those who publicly perform them must separately recognize the attributed revenue generated—if SiriusXM Radio chooses to exclude this revenue from the reported gross revenue to SoundExchange, the deduction must be precise and the methodology transparent. Since SiriusXM Radio does not distinguish the revenue made from different kinds of music programming, the percentage that they attribute to the pre-1972 sound recording revenue can only be defined as an assumption, and is therefore unlawful [11].

SiriusXM Radio excluded incremental revenue that was garnered from the pricing difference between its standard package and its premier package. While the subscription satellite radio service is allowed to exclude channels that don’t include music programming—and the premier package only gives consumers additional talk/news programming—the additional channels offered in the premiere package aren’t offered for a separate charge [12]. In plain, the premier package also includes all of the programming from the standard package, meaning that it unlawfully excludes publicly performed sound recordings from its reported gross revenues [11].

In the same vein, SiriusXM Radio excluded revenue from the Family Friendly and Mostly Music packages, which were originally offered from XM Radio before the merger and contain both music and talk programming. The publicly performed sound recordings in these packages are supposed to be covered by a statutory license. Once again, SiriusXM Radio did not spell out the method by which they separately recognize revenue garnered from music and talk channels in these packages, therefore making the reduction from gross revenue unauthorized by the Copyright Royalty Board [11]. Of all the exclusions, this one makes the least sense.

At the time that this post was published (Nov. 20th, 2013), SiriusXM Radio has declined to comment on the lawsuit and no progress has been made to the public in regards to securing a jury trial date.

New Programming:

David Bowie, photo courtesy of billboard.com [14].

David Bowie’s Limited-Run Station [14]:

From October 30th through November 12th, SiriusXM Radio ran a limited-time station revolving around David Bowie’s latest album, “The Next Day,” which premiered on November 5th. As a promotional effort for the album, the station revealed five songs from an expanded version of the album. Other programming included rare demos, covers and live performances of Bowie’s.

Danny Howard, photo courtesy of billboard.com [15].

UK DJ Danny Howard Brings EDM radio show to BPM [15]:

Premiering December 5th on the BPM station, Danny Howard will join an elite group of European DJ’s to showcase what’s hot in the UK and European electronic dance music scene. With this weekly show, he hopes to break DJs and producers from his side of the pond that might not have gotten stateside exposure. Prior to accepting this stateside residency with SiriusXM Radio, Howard hosted a show on BBC Radio 1 titled, “Dance Anthems with Danny Howard.”

21st Century FOX logo, photo courtesy of 21cf.com [17].

FOX Business returns to SiriusXM Radio [16]:

Originally dropped in 2008 after Sirius Satellite Radio merged with XM Satellite Radio, FOX Business reclaims its spot next to FOX News as another 21st Century Fox radio station. With their nationally regarded collection of personalities, the stations are sure to attract a wide audience with their discussion of news, politics and current affairs. The deal is set to last through 2019.

Sources:

1. SirusXM Logo

2. SiriusXM Corporate Overview

3. SiriusXM Key Executive Bios

4. SiriusXM Stock Quote

5. SiriusXM Third Quarter Financial Results

6. Bloomberg Article on SiriusXM Investor’s Being Shortchanged by the Liberty Media Takeover

7. Billboard Article on SiriusXM Shareholder’s Position on Liberty Media Takeover

8. Liberty Media Asset List

9. Liberty Media Logo

10. SoundExchange Logo

11. SoundExchange Sues SiriusXM Radio – Filed Complaint