If satellite radio died in the woods would anyone be around to hear it? The answer is going to have to wait!

It’s a done deal – Liberty Media Corporation and Sirius XM Radio have reached an agreement for $530M to save satellite radio, in return for an equity stake in Sirius XM. The investment will be provided in two separate phases:

1. Liberty will loan Sirius XM Radio $280 million; $250 million of which will be funded today. The loan will bear an interest radio of 15% and come due in December 2012. This loan will save Sirius XM Radio from bankruptcy.
2. The 2nd phase will be a loan of $150 million to XM Satellite Radio (Sirius XM’s wholly owned subsidiary).

Liberty has also agreed to offer to purchase up to $100 million of the loans outstanding under XM Satellite Radio’s existing credit facilities.Upon completion of the second phase of the Liberty investments, Sirius XM will give Liberty a total of 12.5 million shares of preferred stock convertible into 40% of the common stock of SIRI.

I’m no longer concerned about whether or not my Mobile Threat Net system that is powered by an XM Weather subscription will continue to operate – I’m now worried about my subscription rates doubling…they’ve got to make that money back somehow and so far one thing that satellite radio hasn’t been good at doing is putting profit on the books.

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