Now simple math will show you that 1.1 million subscribers multiplied by the $155 dollars a year subscription fee equals $170 million dollars a year in subscription reveune. (Which does not include ad revenue). While the costs of production, and staff has been quoted at 100 million a year.
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From SIRI's 2nd quarter 10Q:
"In January, 2006, Howard Stern and his agent were granted an aggregate 34,375,000 shares of our common stock as a result of certain performance targets there were satisfied in January, 2006. We recognized expense associated with these shares of $224,813,000 during the six months ended June 30, 2006".
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In addition to the above, Sirius will pay $80,000,000 in cash to Stern during the year ended 12/31/2006, for a total of $304,813,000, which excludes certain other payments that Stern will receive.
So, Sirius has already spent $304,813,000 on Stern, and owes him an addition $320,000,000 minimally over the coming 4 years.
So you have AT LEAST $170 million dollars a year in revenue that was accrediated with Stern NINE MONTHS AGO. And stated expenses of ~$100 million a year.
So, as of now, they're in the hole $134M on what they've already paid, and that is not even counting the OTHER variable costs of these subscribers, and not allocating any CPGA to them.
But somehow Mr. Ray uses his Rayian Logik™ to deduce that SIRI is losing a Half a million dollars a day on Stern. (130 million dollars annually).
620M/5 = 124M. This excludes other payments Stern is receiving for meeting "specified targets". LOL.
So while basic math skills will show you that STERN is MAKING A PROFIT at this point.
I've just shown this to be absolutely incorrect.
Stern costs SIRI bandwidth for 1 audio channel a couple hours a day, five days a week.
Two audio channels 7 days a week. Both using higher bitrates than XM's MLB channels. Of course, MLB requires a tad more bandwidth.
But it is important to remember that due to SIRI's poor engineering decisions (choice of a lousy, obsolete codec, which they are STUCK with), XM can provide about 30% more programming with the same bandwidth at the same sound quality.
As I said, you have no idea what you're talking about. Your commentary is just as informed as that of Sirius Rich and rruff. |
