Liberty Seeks FCC Recognition on Sirius

The battle for control of Sirius XM Radio is coming down to a chicken and egg argument. Liberty Media says it needs approval from the Federal Communications Commission to take "de facto" control of Sirius before it takes steps to exercise such control. Sirius argues the FCC shouldn't grant such approval because Liberty hasn't taken such steps.

A shareholder is deemed to have de facto control of a company if it has less than 50.01% but a big enough stake effectively to be in charge. Liberty since 2009 has held preferred stock that is convertible into 40% of Sirius stock. But unless Liberty converts its preferred shares, it can't vote for all directors and is limited to designating fewer than half the board seats. Liberty asked the FCC last month for approval to take "de facto" control. Sirius responded March 30 saying the petition should be rejected, partly because the media conglomerate hasn't taken actions such as buying more stock.