XM Talks Money Issues with MLB

XM Satellite Radio recently disclosed in a Securities and Exchange Commission filling that it is in discussions with Major League Baseball about a $120 million escrow fund the satellite radio company has maintained as part of a multi-year agreement between the two entities.

The escrow account was a requirement from Major League Baseball for XM's exclusive radio coverage of the league. The escrow's funds have been provided through a surety bond that expires June 30.

In its SEC filing, XM said that earlier in the month it provided $120 million for an escrow arrangement to replace the expiring surety bond. The escrow funds were from operating cash, and XM said it borrowed $62.5 million available under a $250 million revolving credit facility with a group of banks to help fund the account.

XM said it intends to replace the escrow with a letter of credit, surety bond or other similar arrangement.

Certain moves involving the escrow, however, "reduces the company's unrestricted cash liquidity, and could have an adverse effect on our financial position if we are not able to replace the escrow arrangement with a letter of credit, surety bond or other similar arrangement," XM said in its SEC filing.