... But Its Break-Even Is Pushed Back

... But Its Break-Even Is Pushed Back
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... But Its Break-Even Is Pushed Back

It will take longer for XM to reach the break-even point in cash flow.
The company now believes its income will match expenses in 2006, not 2005, because of the cost to acquire Major League Baseball, Opie & Anthony and Bob Edwards.
Competitor Sirius has similar cost challenges thanks to content including Howard Stern. But President/CEO Hugh Panero predicts this is the tail end of the satellite radio companies paying for high-ticket talent.
You "won't see much more of that on the content side," said Panero. He said XM would look for opportunities but be careful not to "get sucked into paying a lot of stock for someone who's doing a 10-minute-a-week voiceover."
XM planned an increase in its fixed expenses for the end of this year into next, to $41 million, related to changes needed for new programming such as baseball. That compares to $32 million in'03. The sum represents costs related to such expenses as operations, satellites, R&D and marketing.
XM is using "third-party resolution procedures" according to executives, to get the remaining 20% it believes it is owed from its insurer to compensate for the solar panel problem of its Boeing satellites.