Sirius Files Annual Report - Several Good Tidbits
Earlier this afternoon, Sirius Satellite Radio filed its annual report with the SEC. Here are some interesting tidbits that we pulled from it:
-When talking about SIR: “We plan to add additional content to our internet offerings in the future.” It looks like we could see either some exclusive content to the internet, or more satellite stations move over to the internet, such as how CNN was added to SIR earlier this year.
-”We also maintain earth stations in Panama and Ecuador to control and communicate with our satellites.” One of those random pieces of trivia.
-’We cannot predict with certainty when Sirius Backseat TV will be introduced.’ Sirius unveiled the first hardware for Sirius Backseat TV in January at CES, but it looks like the rollout may be delayed, again.
-On royalty rates: “In October 2006, we and XM Radio filed our direct case in this proceeding with the Copyright Royalty Board and proposed a royalty rate for our satellite radio subscription revenue. SoundExchange also submitted its direct case in this proceeding and proposed a substantially higher royalty rate than we proposed.”. The agreement expired at the end of 2006, although Sirius will continue to pay the current agreed amount to SoundExchange until the new contract is signed. It looks like SoundExchange and Sirius are still deadlocked in the current price though.
-If Mel is fired, he gets paid for the remainder of the contract and his stock options become available immediately
-If Scott Greenstein is fired, he receives his salary($800k/year) in a lump sum, plus 60% of the expected bonuses he would have received. Other execs are mentioned, and looking at the salaries and strings attached, it must be good to be a top level exec.
-Sirius spent almost $7.2 million in office rent in 2006
-One of the biggest items: programming costs increased almost five-fold, to $551 million in 2006, from $118 million in 2005, accounting for the biggest reason Sirius had such a large loss. Most of it was due to Stern’s large payout of stock.
"If one of our three satellites fails in orbit, our service would be impaired until such time as we successfully launch and commission our spare satellite, which would take six months or more. If two or more of our satellites fail in orbit in close proximity in time, our service could be suspended for at least 24 months. In such event, our business would be materially impacted and we could default on our commitments." Uh Oh, imagine that...
"In October 2006, we ceased operating 11 of our terrestrial repeaters which we discovered had been operating at variance to the specifications and applied to the FCC for new authority to resume operating these repeaters."
"An earthquake, tornado, flood, terrorist attack or other catastrophic event could damage our national broadcast studio, terrestrial repeater network or satellite uplink facility, interrupt our service and harm our business. We do not have replacement or redundant facilities that can be used to assume the functions of our terrestrial repeater network, national broadcast studio or satellite uplink facility in the event of a catastrophic event."
"Individuals who engage in piracy may be able to obtain or rebroadcast our satellite radio service without paying the subscription fee. Although we use encryption technology to mitigate the risk of signal theft, such technology may not be adequate to prevent theft of our signal. If signal theft becomes widespread, it could harm our business."
Edit:I thought I should add, these are direct Copy & Paste. by jfranklin
Edit: And jfranklin, those were indeed interesting points to bring up...
I had heard (long ago) that XM and Sirius had in place some sort of reciprical agreement to host the other in these kinds of cases (probably with reduced capacity but still, enough to keep going). With the merger, that capacity would go away, of course...