Signal Caller: XM Seeking $120M To Help Adhere To MLB Deal
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| XM Satellite Radio Seeks $120M To Uphold MLB Deal |
XM Satellite Radio Holdings last week in a regulatory filing said that its "financial position may be threatened if it cannot find $120[M] worth of financing to adhere to the terms of its high-profile contract" with MLB, according to Alejandro Lazo of the WASHINGTON POST. XM, as part of its eight-year contract with MLB, is "required to set aside $120[M] in an escrow account." XM in July '06 "secured a two-year surety bond to cover that obligation," but with the bond set to expire June 30, the company is "seeking another source of financing to cover its obligation" to MLB. XM on May 15 "created a new escrow account, using $57.5[M] in cash and borrowing $62.5[M] it has available from a credit line," but the company said in the filing that the arrangement "reduces [XM's] liquidity and 'could have an adverse effect on our financial position.'" XM in the filing said, "We are continuing to have discussions with MLB about this escrow and related matters, and there may be further developments." Under its deal with MLB, XM beginning with the '05 season agreed to pay the league $60M annually for programming. The deal is valid through the 2012 MLB season and "can be extended for three years" (WASHINGTON POST, 5/26).
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