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Liberty Media (DirecTV) saves Sirius XM, Mel Karmazin with last-minute loans

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Put away your pitchforks, angry investors, for Sirius XM has been saved by Liberty Media, the company that has a sizable stake in DirecTV. A deal was reached that sees Liberty Media invest (via loans) $530 million in the satellite radio operation, some of which will go straight to paying off that $170ish million in debt the company had until today to come up with. Mel Karmazin stays on as CEO, but Liberty Media gets a boatload of stocks and a few seats on the board of directors.

The deal with Liberty Media, which some had characterized as Sirius XM’s “white knight,” means the satellite radio company doesn’t have to deal with Charles Ergen (the Dish Network guy), who, some had speculated, didn’t exactly see eye to eye with Karmazin; any potential deal between Ergen and Sirius XM placed Karmazin’s future in doubt.

This is probably the best outcome that Sirius XM could have hoped for, the worst of which, obviously, would have been bankruptcy (and, ipso-facto, Karmazin’s possible sacking). That Karmazin managed to secure the loan in this hellish environment should be applauded.

Our long national nightmare is over.

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