Echo Vs Liberty - and for what?

Don't you just love a good chess match between corporate titans?  We are witnessing just this as Sirius XM scrambles to strike a deal (announced today) to save it from a) bankruptcy and b) Charlie Ergen of Echostar fame.  I love when oversized egos go toe to toe, making tactical moves to gain control over a "prized" asset, one in this case whose future value has yet to be determined. In one corner is Charlie Ergen, head of the Echostar/Dish empire who was recently rebuffed by media mogul Mel Karmazin in an overture to merge their two entities.  In the other corner, invited to the match by the aforementioned Mr. Karmazin, is John Malone, ruler of the Liberty Media array of corporations.  I was impressed by Mr. Ergen's initial move after being rebuffed, buying $175M of Sirius XM debt that was due to mature today.  In the end he either gets his investment returned or control of Sirius XM should they file for bankruptcy.  Not to be outmaneuvered Mr. Karmazin invites Liberty Media to the table and consummates a deal that keeps him in control of a company, for now, about whom he once was quoted as asking "how many people are interested in buying this service?".  How one's tune changes when they are given control of the company and subsequently invest $21M of their own money in the business.  This maneuvering only solves Mr. Karmazin's problem temporarily as yet another tranche of debt, approximately $350M, is due later this year.  And I ask, for what?

Perhaps the attraction for Liberty, and Echostar initially, is the value of the underlying assets.  But the satellite radio business as a going concern is suspect.  The business model's main vehicle for growth is the installation of the Sirius XM systems in automobiles by the factory, and the subsequent sale of the service by the automobile dealer.  This is an industry that is on Government life support at the moment and whose business model has its own issues.  Speculation is that either of the Satellite DBS systems could use the satellite and ground assets of Sirius XM to distribute digital content to a variety of environments, like autos, trains, or homes, and to portable devices.  I suggest the person responsible for this business model speak with the MediaFLO folks at Qualcomm and ask how that's going.  And other industries, including the traditional TV Broadcasters, are chomping at the bit to use their multi million dollar investments in digital broadcast assets to use excess capacity to distribute digital content to, you guessed it, portable devices and mobile environments.  This field will be crowded without a sound business model yet to be developed.

All of these machinations may feed large egos, but in the end the only value may be in the orbiting satellites and ground stations, which are probably worth much less than the $3.5B in debt on Sirus XM's balance sheet.  Or its just a way for guys with lots of money to poke their adversaries in the eye and claim, for now, checkmate!