XM Challenged To Maintain $120 Million In Escrow For MLB Deal
This story was written by Joseph Weisenthal.
XM's (NSDQ: XMSR) multi-year agreement to carry Major Leage Baseball requires the satellite operator to maintain $120 million in an escrow account. But the company noted in a filing last week that this account is placing some strains on its finances. From the filing: "This escrow arrangement, which we intend to replace with a letter of credit, surety bond or other similar arrangement, reduces the company's unrestricted cash liquidity, and could have an adverse effect on our financial position if we are not able to replace the escrow arrangement with a letter of credit, surety bond or other similar arrangement."
So does this represent a problem? Not necessarily. If the company can hit is current financial goals, then it believes it'll be fine. And there's no doubt that getting clearance for its long-delayed merger with Sirius (NSDQ: SIRI) should help. A merger would help in another way too: The combined company would have less of a need to pay through the nose for exclusive content deals just to differentiate themselves from their rival. (via THR)
By Joseph Weisenthal