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Satellite Tug-of-War

Just a quick followup on the potential Sirius-XM bankruptcy filing.

Hoping to forestall the Chapter 11 filing, Sirius-XM has approached Liberty Media, parent of DirecTV, on a potential deal. DirecTV already has a relationship with the satellite radio company, carrying XM music on its channels. This puts DirecTV in competition with its satellite TV rival EchoStar, owner of the Dish Network.

A deal may stave off bankruptcy, and even liquidation, of the satellite radio entity. Fred Moran of the Stanford Group told the L.A. Times that it makes sense for the satellite TV companies to bid for Sirius-XM:

All of these companies are satellite-delivered media. If you can cross-market, cross-promote and intertwine services between satellite video and satellite audio, you could strengthen your competitive position.

Sirius-XM is trading at about 6 cents a share. EchoStar, which owns considerable amount of Sirius-XM's debt, is at about $15. DirecTV's stocks have held steady in the past year despite the plunging market, trading at about $23 a share.