Commitments and Contingencies |
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies |
Commitments and Contingencies The following table summarizes our expected contractual cash commitments as of September 30, 2026:
(1)The table does not include our reserve for uncertain tax positions, which at September 30, 2026 totaled $88.
Debt obligations. Debt obligations include principal payments on outstanding debt and finance lease obligations.
Cash interest payments. Cash interest payments include interest due on outstanding debt and finance lease payments through maturity.
Satellite and transmission. We have entered into agreements for the design, construction, launch and insurance of one additional satellite: SXM-12. We have procured insurance for SXM-11 and SXM-12 to cover the risks associated with each satellite's launch and first year of in-orbit operation. We also have entered into agreements with third parties to operate and maintain satellite telemetry, tracking and control facilities and certain components of our terrestrial repeater networks.
Programming and content. We have entered into various programming and content agreements. Under the terms of these agreements, our obligations include fixed payments, advertising commitments and revenue sharing arrangements. In certain of these agreements, the future revenue sharing costs are dependent upon many factors and are difficult to estimate; therefore, they are not included in our minimum contractual cash commitments.
Sales and marketing. We have entered into various marketing, sponsorship and distribution agreements to promote our brands and are obligated to make payments to sponsors, retailers, automakers, radio manufacturers and other third parties under these agreements. Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors.
Satellite incentive payments. Lanteris Space Systems (formerly Maxar Space), the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments upon SIRIUS FM-6, SXM-8, SXM-9, SXM-10 and SXM-11 meeting their fifteen-year design life, which we expect to occur.
Operating lease obligations. We have entered into both cancelable and non-cancelable operating leases for office space, terrestrial repeaters, data centers and equipment. These leases provide for minimum lease payments, additional operating expense charges, leasehold improvements and rent escalations that have initial terms ranging from to fifteen years, and certain leases have options to renew.
Royalties, Minimum Guarantees and Other. We have entered into music royalty arrangements that include fixed payments. In addition, certain of our podcast agreements also contain minimum guarantees. As of September 30, 2026, we had future fixed commitments related to music royalty and podcast agreements of $1,597, of which $235 will be paid in 2026 and the remainder will be paid thereafter. On a quarterly basis, we record the greater of the cumulative actual content costs incurred or the cumulative minimum guarantee based on forecasts for the minimum guarantee period. The minimum guarantee period is the period of time that the minimum guarantee relates to, as specified in each agreement, which may be annual or a longer period. The cumulative minimum guarantee, based on forecasts, considers factors such as listening hours, downloads, revenue,
subscribers and other terms of each agreement that impact our expected attainment or recoupment of the minimum guarantees based on the relative attribution method.
We have entered into certain tax equity investments in which we expect to make future contributions. These future contributions are expected to be made over the remaining respective terms of the investments and totaled $559 as of September 30, 2026, of which $23 is expected to be paid during the remainder of 2026 and the remainder thereafter.
Several of our royalty agreements also include provisions related to the royalty payments and structures of those agreements relative to other licensing arrangements, which, if triggered, cause our payments under those agreements to escalate. In addition, record labels, publishers and performing rights organizations with whom we have entered into direct license agreements have the right to audit our content payments, and such audits often result in disputes over whether we have paid the proper content costs.
We have also entered into various agreements with third parties for general operating purposes.
In addition to the minimum contractual cash commitments described above, we have entered into other variable cost arrangements. These future costs are dependent upon many factors and are difficult to anticipate; however, these costs may be substantial. We may enter into additional programming, distribution, marketing and other agreements that contain similar variable cost provisions. We do not have any other significant off-balance sheet financing arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Legal Proceedings
In the ordinary course of business, we are a defendant or party to various claims and lawsuits, including those discussed below.
We record a liability when we believe that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount of liability that has been previously accrued and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved; (vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. In such instances, there may be considerable uncertainty regarding the ultimate resolution of such matters, including the likelihood or magnitude of a possible eventual loss, if any.
New York State v. Sirius XM Radio Inc. On December 20, 2023, the People of the State of New York, by Letitia James, Attorney General of the State of New York (the “NY AG”), filed a petition (the “Petition”) in the Supreme Court of the State of New York, New York County (the “New York Court”), against Sirius XM Radio Inc., which, following the Transactions, is now Sirius XM Radio LLC. The Petition alleged various violations of New York law and the federal Restore Online Shoppers’ Confidence Act (“ROSCA”) arising out of Sirius XM's subscription cancellation practices. In general, the Petition alleged that Sirius XM requires consumers to devote an excessive amount of time to cancel subscriptions and has not implemented cancellation processes that are simple and efficient.
The Petition claimed to be brought under certain provisions of New York law that authorize the NY AG to initiate special proceedings seeking injunctive and other equitable relief in cases of persistent business fraud or illegality. The Petition sought: a permanent injunction against violating provisions of New York law and ROSCA arising out of the alleged deceptive practices associated with Sirius XM's subscription cancellation procedures; an accounting of each consumer who cancelled, or sought to cancel, a satellite radio subscription, including the duration of the cancel interaction and the funds collected from such consumers after that interaction; monetary restitution and damages to aggrieved consumers; disgorgement of all profits resulting from the alleged improper acts; civil penalties and the NY AG’s costs. Sirius XM filed an answer to the Petition and cross moved for summary judgment with respect to various claims asserted in the Petition.
In November 2024, the New York Court granted Sirius XM summary judgment on all but one of the NY AG's claims. The New York Court did find that Sirius XM's cancellation practices violated the “simple mechanism requirement” for subscription cancellations contained in ROSCA. As of November 27, 2024, Sirius XM permits New York residents who purchase a subscription online to also cancel that subscription online, a cancellation mechanism that we believe is at least as easy to use as the method the consumer used to initiate the subscription. The NY AG appealed the four counts with respect to the Petition for which the New York Court granted Sirius XM summary judgment. Sirius XM appealed the one count in the Petition, the violation of ROSCA, with respect to which the New York Court granted the State of New York summary judgment. On November 6, 2025, the Appellate Division affirmed the New York Court’s Order on all counts. On January 23, 2026, the NY AG sought leave to appeal the Appellate Division’s affirmance, which Sirius XM opposed. On May 14, 2026, the Appellate Division granted the NY AG’s motion for leave to appeal the Appellate Division’s affirmance to the Court of Appeals. The NY AG’s appeal, which is now pending in the Court of Appeals, challenges the lower courts’ ruling that the NY AG is prohibited from obtaining relief on behalf of customers outside of New York. The NY AG has also moved the New York Court for an injunction and accounting with respect to the ROSCA claim, which the court granted on April 1, 2026.
Sirius XM believes it has substantial defenses to the action and intends to defend this action vigorously.
U.S. Music Royalty Fee Actions and Mass Arbitrations. Commencing in 2023, a number of putative class actions and mass arbitration demands have been commenced against Sirius XM relating to its pricing, billing and subscription marketing practices. Although each class action and mass arbitration demand contains unique allegations, in general, the actions and arbitrations allege that Sirius XM falsely advertised its music subscription plans at lower prices than it actually charges, that it allegedly did not disclose its “U.S. Music Royalty Fee,” and that Sirius XM has taken other actions to prevent customers from discovering the existence, amount and nature of the U.S. Music Royalty Fee in violation of various state consumer protection laws. Several of these claimants also asserted additional causes of action under the Electronic Funds Transfer Act.
Over half of the approximately 70,000 purported mass arbitration claims have been withdrawn by counsel or closed by the American Arbitration Association (the "AAA"). On January 13, 2026, Sirius XM entered into a settlement, which was effectuated during the three months ended June 30, 2026, and which resolved most of the remaining mass arbitration claims and the previously disclosed Carovillano, Burns, Kirkpatrick, Balmores and Woods lawsuits. The settlement did not have a material adverse effect on Sirius XM’s business, financial condition, results operations or cash flows.
The sole remaining related putative class action is Stutsman, et al. v. Sirius XM Radio LLC. On August 20, 2026, the United States District Court for the Western District of Washington remanded Stutsman to the Washington State Superior Court for Snohomish County. Sirius XM believes it has substantial defenses to the remaining mass arbitration claims and the claims asserted in Stutsman and intends to defend itself vigorously.
Mechanical Licensing Collective v. Pandora Media, LLC. On February 12, 2024, the Mechanical Licensing Collective (“MLC”) sued Pandora in the Middle District of Tennessee for alleged underpayment of royalties on Pandora’s free radio service. The MLC contends that various Pandora offerings along with certain other ancillary features convert Pandora’s entire free noninteractive radio service into an interactive service for which Pandora owes mechanical license royalties and that Pandora should be paying additional mechanical royalties for its Pandora Plus service, which would require Pandora to have paid and continue to pay significantly higher royalties. On September 30, 2026, the court denied the parties’ cross-motions for summary judgment. The court has not yet scheduled a new trial date. On October 14, 2026, the MLC filed a motion requesting that the court reconsider its summary judgment order and grant the MLC summary judgment or, in the alternative, allow the parties to file new, shorter motions for summary judgment. In the further alternative, the MLC requested that the court certify its summary judgment order for an interlocutory appeal. Pandora filed its response to the motion for reconsideration on October 28, 2026, in which it opposed the MLC’s request that the court grant the MLC summary judgment but did not oppose the request for reconsideration of the MLC’s motion for summary judgment as long as the Court also reconsiders its denial of Pandora’s motion for summary judgment, nor did Pandora oppose the MLC’s alternative request for leave for the parties to file new, shorter motions for summary judgment. Pandora took no position on the MLC’s request for certification of an interlocutory appeal..
Vladimir Fishel, et al. v. Liberty Media Corporation, et al. As previously disclosed, in October 2024, purported stockholders commenced an action in the Court of Chancery of the State of Delaware against Liberty Media, John C. Malone and members of the board of directors of Old Sirius relating to the Transactions. The plaintiffs allege that the Transactions were unfair to minority stockholders and unduly favored Liberty Media because, among other things: Sirius XM Holdings has taken
on certain tax liabilities; Sirius XM Holdings has assumed certain Liberty SiriusXM debt; and the Transactions enabled Liberty Media to appoint a majority of Sirius XM Holdings’ board of directors with staggered terms to give Liberty Media at least three years of board-level control. The plaintiffs also allege that the Transactions closed a multi-billion-dollar valuation gap between the price at which the Liberty SiriusXM common stock traded in the market and the net asset value of the underlying assets the Liberty SiriusXM common stock “tracked,” which solely benefited Liberty Media stockholders, and allege that the Special Committee failed to negotiate a fair exchange ratio in light of these benefits to Liberty Media. Liberty Media and certain individual defendants answered the complaint, while the Special Committee members and the remaining directors moved to dismiss the complaint. On April 13, 2026, the court issued a decision dismissing the Special Committee members from the case but allowing the claim against the remaining directors to proceed. The case against Liberty Media, John C. Malone and the non-Special Committee directors remains ongoing.
Broadcast Music, Inc. v. Sirius XM Radio LLC. As previously disclosed, SiriusXM has an arrangement with Broadcast Music, Inc. (“BMI”), and other performing rights organizations to license the rights of public performance for the musical compositions SiriusXM transmits via its satellite radio and streaming services. Currently, SiriusXM has an interim license with BMI. BMI is subject to an antitrust consent decree with the Department of Justice that provides for judicial rate-setting in the event of a negotiating impasse. In September 2024, while SiriusXM was negotiating new final rates and terms with BMI for the period beginning January 1, 2023, BMI filed a Petition in the United States District Court for the Southern District of New York requesting a determination that the rates it quoted in May 2023 for the 2023-2027 period for the license requested by SiriusXM are reasonable or, in the alternative, for an order setting reasonable rates for SiriusXM’s public performance of songs in the BMI repertoire. That proceeding is on-going, and trial is set to commence on January 11, 2027.
Other Matters. In the ordinary course of business, Sirius XM Holdings, SiriusXM and Pandora, are defendants in various other lawsuits, mass arbitration and individual arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf of themselves and on a class action basis; former employees; parties to contracts or leases and owners of purported patents, trademarks, copyrights or other intellectual property. None of these other matters, in our opinion, is likely to have a material adverse effect on our business, financial condition or results of operations.
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