Will Sirius-XM Cut Talent Costs? (SIRI, XMSR)

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By Douglas A. McIntyre Updated Published
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We already saw the first projections yesterday from Sirius Satellite Radio Inc. (NASDAQ: SIRI) and XM Satellite Radio Inc. (NASDAQ: XMSR).  We also saw the resounding thud that the markets greeted the company’s with.

What is interesting is what is going to happen to costs cuts not just at the base level.  We have been trying to calculate the future values, which are very different from the values of 2005, regarding the content from the top talent that both XM and Sirius have generated.

The first such talent question boils down to Howard Stern with his lavish contract.  It is 100% attributable that he did garner much of the growth of Sirius.  But Sirius has also lost money every quarter along the way.  What about Martha Stewart or Oprah?  Fortune has a similar piece discussing the contract cost ramifications of a combined Sirius-XM with its top talent.

We already know that the companies have to refinance their existing debt.  And Goldman Sachs isn’t alone in believing new monies have to be raised.   

The time for this merger to close and get consummated has finally come.  Unfortunately there are still more questions than there are answers.

Jon C. Ogg
July 1, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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