Tuesday, April 10, 2012

CBC's bet on satellite radio could pay dividends

Amid all the slashing at the CBC, there’s a bright spot: the Corporation has made a small fortune on its investment in satellite radio.
And as the beleaguered broadcaster struggles to cut $115-million from its $1.1-billion in federal funding over the next three years, its decision to get in on the early days of satellite radio could be about to pay dividends – literally. 
 Canadian Satellite Radio Holdings Inc., in which the CBC owns a significant minority stake, has an increasingly large pile of cash that has analysts anticipating a quarterly payout to investors that would be a welcome boost to the CBC’s bottom line.
 CBC was one of three investors that paid $12-million each to create Sirius Canada in 2004.Eight years later, the satellite radio company it founded merged with its only competitor last year, earning CBC an $18-million cash payout. It also received a stake in the new company, which is worth about $53-million as of yesterday’s market close. 

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