Liberty Media's John Malone takes risky leap into satellite radio with Sirius investment
John Malone, the local mogul at the helm of Liberty Media, didn't become one of the richest men in the state by making foolish investments. But his decision, made public moments ago, to provide $530 million in loans to Sirius XM Radio in exchange for a 40 percent equity stake in the struggling operation hardly looks like a sure thing.
Yes, the technology works, and works well. But Sirius XM's subscription model, which requires users to pay a monthly fee (as well as purchase pricey equipment), seems particularly unsuited to tough fiscal times like these. Even before the economy fully entered the tank, Sirius and XM were on such tenuous footing that, last July, these onetime competitors were forced to merge in order to survive. Moreover, the radio medium in general is taking it in the shorts right now, as witnessed by a parade of recent bad news blogs in this cyber-space: "The Bloodletting Starts at Clear Channel Denver," "Shakeup at KOOL 105, The Mix and The Wolf," "Jack-FM Lays Off Majority of Staff" and more.
Even Malone's critics concede that he's no dope, so perhaps his latest move will prove to be a master stroke -- instead of a Sirius error.
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