Business

SHOOTING THE MOON

Sirius XM CEO Mel Karmazin recently asked to buy the beleaguered satellite radio company DirecTV, in a desperate bid to avoid filing for bankruptcy, or worse, entering into a deal with EchoStar’s Charlie Ergen, sources told The Post.

The two sides have held discussions in the past, and sources said Karmazin sought to revisit those talks after learning that Ergen was buying up Sirius XM debt in order to take control of the company.

Ergen has acquired $125 million of the $300 million of Sirius XM debt that comes due on Tuesday.

The company doesn’t have enough cash to make the remaining $175 million payment, leaving Karmazin with two unsavory options: file for bankruptcy or strike a deal with Ergen.

From Karmazin’s perspective, doing a deal with DirecTV is preferable because merging with Ergen means Karmazin at best would have to give up control, and at worst would be forced to leave the company.

Indeed, Karmazin need look no further than EchoStar’s acquisition of Sling Media for a glimpse of what his own future might look like should Sirius XM be bought by EchoStar.

Sling’s founders, brothers Blake and Jason Krikorian, as well as entertainment executives Jason Hirschhorn and Ben White, last month left Sling after what sources said was two years of micromanaging by Ergen.

Karmazin’s personal experience working for someone who controls the company also explains why he’s searching for an alternative to Ergen. Karmazin chafed daily during his four years under the iron rule of Viacom’s Sumner Redstone, and sources said that being forced into a deal with Ergen, who is described by those who know him as one who “doesn’t play well with others,” would be Karmazin’s worst nightmare, sources said.

By contrast, if Karmazin struck a pact with DirecTV, he’d stand a good chance of staying at Sirius XM in some capacity, since DirecTV’s largest shareholder, Liberty Media’s John Malone, is more hands-off. “There’s a lot of smarts to doing a deal between a satellite-television company and a satellite-radio company, but there’s no way [Ergen and Karmazin] can co-exist,” said a source who’s negotiated deals with both men.

But Karmazin may have no choice but to deal with Ergen.

A source close to DirecTV said emphatically that the company wasn’t going to make a bid for Sirius XM.

Representatives of Liberty Media, DirecTV and Sirius XM did not return calls for comment.

Sources said that letting it be known that Sirius XM was leaning toward filing for bankruptcy was Karmazin’s attempt to coax a white knight to come forward.

Dangling the bankruptcy option at the very least provides Karmazin with a little negotiating leverage since Ergen isn’t guaranteed to gain control of the company under Chapter 11; he’d have to bid in an auction process just like everyone else.

Problem is, a bankruptcy filing isn’t in the interest of Sirius XM’s equity investors – Karmazin included – since they would be wiped out.

That is leading some industry observers to bet Karmazin ultimately will have no choice but to do a deal with Ergen.

“Sure, Mel’s emotional and thin-skinned and has a big ego, but in the end he has to do what’s best for his shareholders,” said the Carmel Group’s Jimmy Schaeffler.

peter.lauria@nypost.com