When Sirius Satellite Radio (NASDAQ:SIRI) struck a broadcasting deal with the NFL two years ago, its value -- $220 million -- was a matter of debate. Having lapped the 200,000 mark in subscribers, was the fledgling provider overpaying for the seven-year football deal, given its modest base of listeners? Even rival XM Satellite Radio (NASDAQ:XMSR) didn't bid higher, despite the luxury of having a larger installed base to cover the programming costs.

The bigger question at the time was the value of NFL games on satellite radio. DirecTV (NYSE:DTV) had made a mint off its NFL Sunday Ticket package, but would gridiron fans pay up for audio content when terrestrial radio offered the local team for free?

Sirius has silenced most of those critics. The company expects to close out the year with 3 million subscribers, making the programming-cost-per-subscriber far more reasonable. When the deal is up for renewal in five years, it's more than likely that Sirius or XM will pay the NFL far more than the $32-million-per-season average of the original deal. That's another indication that Sirius did the right thing.

However, there's a problem with calculating the value of the deal. It's costing Sirius a lot more than the original $220 million in cash and equity because the original deal wasn't a simple cash transaction. Sirius agreed to pay $188 million in greenbacks, most of that over the final two seasons. The other $32 million comes from the 15 million shares of Sirius stock that the NFL received.

At the time, Sirius stock was trading for barely $2 a share. But with Sirius shares trading near $7 at the moment, those 15 million shares are actually worth $105 million -- which means the value of the deal is actually closer to $300 million.

It gets worse. Sirius also gave the NFL 50 million warrants at a strike price of $2.50 apiece. Today, those warrants are way in the money. They're worth another $225 million for the NFL -- more than the value of the entire deal when it was first announced. That $220 million deal is now more like a $518 million deal.

When it comes to acquisitions, investors tend to see warrants as a win-win deal. After all, they are valuable only if the share price rises. However, the NFL was not the reason that shares of Sirius have surged higher over the past year; it wasn't until Howard Stern signed up with Sirius a year ago that the stock broke out of its dismal penny-stock pricing range.

That's the rub of deals that are not all-cash transactions: Their eventual value is totally unpredictable.

The upside of the downside
Sure, it sometimes works out for a public company. Throughout the mid-1990s, CMGI (NASDAQ:CMGI) sold subsidiaries or venture capital stakes to companies like America Online and Yahoo! (NASDAQ:YHOO) in exchange for stock. It then took advantage of soaring share prices in the dot-com boom era to unload those shares for real money -- and lots of it. CMGI is playing a different game these days -- a more dependable, actual-business-plan game, to be frank -- but it probably waxes nostalgic from time to time. Or maybe it doesn't, given today's market.

A more recent example would be Archipelago Holdings (NYSE:AX). The company behind the popular ArcaEx electronic trading platform accepted an offer to merge with the New York Stock Exchange earlier this year.

Under the terms of the deal, Archipelago investors would receive a 30% stake in the new company, NYSE Group. But because the venerable 212-year-old Wall Street institution is privately held, investors didn't come to appreciate the true value of the pairing until long after the deal was first announced.

That worked out perfectly for subscribers of the Motley Fool Rule Breakers newsletter service. The stock was recommended earlier this year at $20.42 a share, just before the merger was announced. The stock has gone on to more than double.

Stocks cut both ways
By the same token, some companies fall apart after stock-based pairings are announced. Remember when Time Warner (NYSE:TWX) was acquired by AOL? The deal was valued at more than $160 billion at the time. Combined, the companies were worth a whopping $360 billion in the open market. Today, shares of the combined company can be had for $90 billion, far less than either of the two individual parts.

When Miva (NASDAQ:MIVA) announced its intention to acquire Europe's eSpotting in the summer of 2003, it was going to cost the profitable paid-search provider 8.1 million shares and $27 million in cash. Miva, known as FindWhat.com at the time, would then have a budding global online empire of 40,000 advertisers. With a buoyant share price, the deal was worth $163 million at the time. A few months later, the terms were revised slightly lower. Now, with Miva's stock down to $6, the entire company is being valued at just a little more than the original value of the eSpotting deal (which would be worth $62 million in today's market dollars).

That is why deals, particularly stock-based ones, deserve to be followed long after handshakes are exchanged. That's when being acquired at a premium can shrink to a discount or a seemingly cheap modest markup can skyrocket in value.

It's also why investors should always be on the lookout for companies that are buyout candidates, particularly in industries where the acquirer's own stock is bound to continue to appreciate. That's why you may want to see which of the two dozen stock picks that have been recommended in Rule Breakers will be the next Archipelago. These are the dynamic industry-altering companies that tend to be gobbled up at healthy premiums.

Yes, it's a premium research service, but if you're skeptical, you can always go for a risk-free trial today and make the most of the service -- gratis -- through Oct. 20. That will include access to the brand-new issue that will be sent to subscribers -- with the next batch of recommendations -- later today.

And, no. Last I checked, you can't pay for a newsletter with a stock certificate.

Longtime Fool contributor Rick Munarriz is a Sirius subscriber but he does not own shares in any of the companies mentioned in this story. Time Warner is a Motley Fool Stock Advisor recommendation. The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.