Sirius XM won’t be raising prices this year after all. The price freeze negotiated to win FCC approval for the merger of Sirius and XM had been due to expire this summer, but now settlement of a lawsuit has extended the freeze.
To settle a lawsuit brought by subscriber Carl Blessing in federal court, Sirius XM has agreed to continue the freeze. Blessing’s lawsuit had claimed damages over the price hike for people with multiple subscriptions and how Sirius XM had calculated the increase for music royalty fees.
“As part of the settlement, we have agreed that commencing on July 28, 2011, the date on which our voluntary commitment not to raise rates on our basic satellite programming package is scheduled to lapse, through December 31, 2011, we will not: raise the price of our basic satellite radio service, our other programming packages or our internet streaming services; increase our US Music Royalty Fee; or decrease our multi-radio discount. Existing subscribers will be allowed to renew their current subscription plans at our current rates prior to December 31, 2011. Former subscribers who terminated their subscriptions after July 29, 2009 and go to our website will be entitled to receive, at their election, either: one month of our basic satellite radio service or one month of our Internet streaming, at no charge. We have also agreed to pay the costs of providing notice to the plaintiff class and not to oppose an application by counsel for the plaintiffs for reimbursement of up to $13 million of their fees and expenses. The settlement does not require us to make any other cash payments to the plaintiff class or counsel to the plaintiffs,” Sirius XM reported in an SEC filing.
“In connection with the settlement, we did not admit any wrongdoing, any violation of any statute or law, or the truth of any claims or allegations of the plaintiffs. Despite our belief that the claims asserted by the plaintiffs were untrue, we entered into this settlement because we believe it was in the best interest of our stockholders to avoid further legal expense and inconvenience and eliminate the distraction of this protracted litigation,” the company added.
The settlement is subject to court approval.