The Battle for Control over Sirius XM Continues and the Momentum Seems to be Shifting in Favor of John Malone’s Liberty Media.

Story by Talkers

Yes, what seemed like an odd story just a matter of months ago has developed into a high stakes big business drama.  John Malone and Liberty Media, the company that rescued the merged satellite radio company from burning up in the atmosphere back in 2009 by gobbling up 40% ownership at what has turned out to be a super good deal for them has asked the FCC for approval to take outright control of Sirius XM Radio, noting it plans to raise its stake in the satellite radio company above 50%. The request follows disclosure earlier this week that Liberty, SiriusXM’s largest shareholder, was inching up its collection of shares in Sirius from approximately 46.2% to an aggressively postured 48%.

In last week’s filing, Liberty said it will “have purchased sufficient shares of Sirius’s common stock and will convert its preferred shares such that the transfer of control will be completed within 60 days of commission consent.”

Raising its stake above 50% and being granted FCC approval to take absolute control opens the way for Liberty to replace Sirius management and spin its Sirius stake off to Liberty shareholders.

But would replacing Sirius XM CEO Mel Karmazin be a wise move?  Probably not.  Although coldly brash and hard-nosed as they come, Karmazin is an extremely effective radio broadcast executive and business strategist who has done a world class job of getting Sirius XM to its present state of health.  Reports from inside Liberty indicate that John Malone recognizes that and is giving “Mel” wiggle room to back pedal off his earlier blurts that he wouldn’t work for anyone else.

There is a huge lesson here for wannabe broadcast industry moguls (and there sure are a lot of them out there):  When you turn to venture capitalists and outside big money investors to save your ass, they will likely wind up owning it.