Sirius XM Radio Seeks to Renegotiate Some of Its Content Deals

It is said that Sirius XM is trying to renegotiate some of its most expensive content deals in an effort to repay debt owed and avoid bankruptcy dealings. Let’s take a look at some of Sirius XM Radio's content deals.

Below are some of Sirius XM Radio's more costly content deals and its current status:

• Major League Baseball - Sirius XM Radio has an 11 year deal with Major League Baseball that doesn't expire until 2011. This deal was originally struck by XM and costs Sirius XM $60 million per year. It is said that Karmazin is slightly bothered by the MLB deal. According to Business Week, Karmazin and MLB recently met to attempt to renegotiate the deal but the meetings didn't go according to plan. As part of the MLB baseball deal Sirius XM Radio is required to hold 120 million dollars in an escrow account. The 120 million dollars is protected from possible bankruptcy proceedings. It should also be noted that though Sirius XM Radio pays MLB 60 million dollars per year, MLB isn't yet available on `Best of Sirius` programming
• National Football League - It is said that Karmazin has also talked to NFL officials for which Sirius XM Radio currently pays 23 million annually. The N.F.L. deal is a seven-year, $220 million deal made in 2003. This deal required Sirius to put $85 million into escrow to cover the 2006 to 2009 rights payments. The 85 million is also protected from possible bankruptcy proceedings. It seems as though the partnership between Sirius and NFL is on good grounds. The NFL deal originated with Sirius, not XM.
• Howard Stern - Howard Stern has a five year 500 million dollar deal with Sirius XM Radio. It is not known if Howard has been contacted by Sirius to renegotiate his deal. The likeliness that they reach out to Howard to renegotiate his deal is probably slim. Howard has two years left on his deal.
• Oprah Winfrey - Sirius XM Radio has a 3 year 55 million dollar deal with Oprah Winfrey's Harpo Productions. According to Business Week, Oprah's executives recently met with Sirius XM Radio and were recently asked to renegotiate their deal. The deal expires in fall of 2009.
• Martha Stewart - Martha Stewart has a 7.5 million dollar a year deal with Sirius XM Radio
• Chris Russo - Chris Russo has a five year 3 million dollar per year deal with Sirius XM Radio

There are lots more content acts costing Sirius XM Radio lots of dollars on an annual basis such as NBA, PGA Tour, NHL, Nascar and others. It's probably in the best interest of some of these content providers to consider renegotiating the terms of their deals rather than have a bankruptcy judge to do it. Under Chapter 11 some of these deals can be wiped out all together to repay creditors.

Source - Business Week, New York Times