Sirius XM Preparing to File Bankruptcy?

[Emabulator]

The New York Times is reporting (http://www.nytimes.com/2009/02/11/technology/companies/11radio.html?_r=3&ref=technology) that Sirius XM Radio appears to be preparing for a possible bankruptcy filing.

But now Sirius XM, the satellite radio company, has problems with much bigger price tags. It has hired advisers to prepare for a possible bankruptcy filing, people involved in the process said.

That would, of course, be a grim turn of events for the normally upbeat Mr. Karmazin, Sirius XM’s chief executive, who had hoped to create a mobile entertainment juggernaut with stars like Howard Stern (http://topics.nytimes.com/top/reference/timestopics/people/s/howard_stern/index.html?inline=nyt-per).

It is unclear how a bankruptcy would affect customers. Service is unlikely to be interrupted, but the company might have to terminate contracts with high-priced talent like Mr. Stern or Martha Stewart (http://topics.nytimes.com/top/reference/timestopics/people/s/martha_stewart/index.html?inline=nyt-per).

A bankruptcy would make Sirius XM one of the largest casualties of the credit squeeze. With over $5 billion in assets, it would be the second-largest Chapter 11 filing so far this year, according to Capital IQ. The filing by Smurfit-Stone, with assets of $7 billion, has been the year’s biggest to date.

[blackzc]

No prob with me, i love AM radio. wifi and all that stuff will be up soon enough so car radios will be getting internet radio anyhoo. And whatever gets stern off the air is a plus for me, he is bad for your soul.

[Zeal]

now what is howard stern gonna do

[thenumber5]

Well on howard today they said there is a big investor who owns some Satellite TV service who is going to step in before Sirius/Xm files, so this is nothing more than another satellite is going away and all the big talent is going back to terrestrial article

[LilAbner]

Terrestrial radio is so awful ever since I got Sirius. As much as I hated commercials before, I *loathe* them now that I have commercial-free music on Sirius, and very few of them on talk stations like Howard's.

[Chimpbot]

I hope service goes uninterupted...my new car came with a Sirius receiver. It's too snazy to lose!

[TheHulk]

It's certainly not perfect but it's a million times better than regular radio. Plus if I'm on the road in the boonies I can always listen to ESPN or NFL radio for a little while.

[ScottBravesFan]

NO!!!!!!!!

I can't go back to regular radio. XM messed up when the merged with Sirius. Sirius was already in trouble and XM's stock seemed to be doing ok at least compared with Sirius. I can't live without the MLB channel on there. I have an hour commute to school twice a week so it comes in handy.

[92miata]

i still can't believe that people pay for radio. wow. nickel and dime you to death. i have over 600 original cd's and make all kinds of greatest hits cd's. i wonder when good music will come back. i think the last cd i purchased was a tool cd 5 years ago.....:)

[Loganrapp]

i still can't believe that people pay for radio. wow. nickel and dime you to death.

Try it first.

[Tralfaz]

i still can't believe that people pay for radio. wow. nickel and dime you to death. i have over 600 original cd's and make all kinds of greatest hits cd's. i wonder when good music will come back. i think the last cd i purchased was a tool cd 5 years ago.....:)

For the price of 1 CD a month I get a ton of music that I might not have known about if I wasn't listening to a station that exclusively plays the style of music I want. Sirius kinda works out for me.

Add in the original programming such as Stern and I'm pretty addicted. As to the Satellite TV company they were talking about, it's Echostar (which owns the Dish Network). They've actually had some Sirius channels on there for a while.

If they do go under the biggest shame is that the crooked politicians bought out by the radio broadcasters that delayed the merge thus seriously damaging both companies will win.

[blackzc]

i wonder when good music will come back. i think the last cd i purchased was a tool cd 5 years ago.....:)


This is why i wont pay for it. With the internet and ipods and even MP3s burned onto CDs i just cant pay 15$ a month to listen to modern music. I guess i have my taste and what i need i already have. Hell between video game remixes, free stuff and podcast i dont listen to music anyway. Im sure its great for sports though.

[ShankTheChicken]

I can't help but smile when I read this article. I was one of the XM zealots for about a year, until somebody smashed in my car window and stole my receiver. So I go online to cancel my subscription, and lo and behold...no option to do so. Turns out the only way to cancel is to call them up during regular business hours. And when I attempted to do so, I was given the runaround. They would offer me a discount of some sort, I would refuse, they would transfer me. Sometimes they just hung up instead. Finally, after an hour of this, they relented and canceled my service.

After reading a few commentaries online, it seems I was actually pretty lucky. Several people have reported four or five hours of runaround before finally getting what they wanted, and even then some of them would find that their credit card was still being billed months later.

I loved the stations they offer, but hated the customer service. Had they made cancellation simple, I would consider purchasing a new receiver in the future. As it is, I don't want to go through that kind of hassle again.

[Zurik]

It sucks that satellite radio is doing so bad. I wonder if podcasts are hurting it? I listen to the Adam Carolla show with no commercials this way.

[almightyorb]

The only thing I am concerned about is how this will affect my buddays, Ron and Fez - noon to 3 @ XM202/SIR197 :)

[drakkarim]

"high price talent" != skills != profit = good milking of investors

[Roc Ingersol]

now what is howard stern gonna doAnything he wants?

The Sirius thing demonstrated that there's a few million people that will follow him anywhere. My guess would be premium priced internet streaming with delayed ad-bearing podcasts as a secondary product.

[Flatpicker]

Wait a min here.
Let me get this straight. XM and Sirius merged recently and are now filing Bankruptcy?
How does that make sense? If you could get approval for the merger, shouldn't their financial statements have prevented this?

[Fubl]

chances are its chaper 11 so they can dump some of siris's high priced contracts. its probably a good move, bankruptcy is not always bad as the media would have you believe. Yes it hurts but sometimes people/companies go into bankruptcy for correct reasons and can come out in 3-5 years even though its on their records for 6-7. It allows to renogotiate contracts, rearrange debts into more consolidated form.

[captainspankypants]

Yeah, I don't think they're going under any time soon. It's much more likely they're just preparing for a hostile takeover. New management and restructuring might lead to future profitability, so this could end up being a good thing for Sirius XM listeners overall.

[balamoor]

Satellite is basically the Laser Disc of Radio. Mobil Internet Radio will completely replace it in a couple years. MS, Choice, and Real have pretty much laid the groundwork for all of this. Internet is really the future for all Media ….. On another note I'm actually surprise anyone still listens to Stern..he is such a bitter hate filled fuck...and that whole attitude belongs in the early 90's

[Tralfaz]

Wait a min here.
Let me get this straight. XM and Sirius merged recently and are now filing Bankruptcy?
How does that make sense? If you could get approval for the merger, shouldn't their financial statements have prevented this?

A few things happened that caused this. One is that XM have large debts they needed to pay off, so Sirius (which was already in the red) had to pay it off when the merge happened. Another problem is that car manufacturers were not willing to commit to installed radios in the same way they had in the past since they didn't know if the merge would happen and they didn't want to install radios without knowing if XM would just go away.

Some analysis by Jim Kramer said that the FCC and DOJ purposely dragged their feet on approving the merger until they knew both companies were screwed as far as auto installs went. That plus the money both companies lost by the merger dragging on for a year and a half (which I think made it the longest approval process in history). At least a few people involved in the FCC approval process receive campaign contributions from broadcasters association.

So, in an economy where our government should have been bending over backwards to avoid putting any companies out of business, personal interests of politicians made life rough for these guys.

[Flatpicker]

Satellite is basically the Laser Disc of Radio. Mobil Internet Radio will completely replace it in a couple years. MS, Choice, and Real have pretty much laid the groundwork for all of this. Internet is really the future for all Media ….. On another note I'm actually surprise anyone still listens to Stern..he is such a bitter hate filled fuck...and that whole attitude belongs in the early 90's

I don't know if I agree.
Wireless Internet is fine, but, it's 2 way communication and it's use to multicast music is a waste of RF space.

[Johan]

They're apparently going to reorganize, not liquidate. Satellite radio isn't going anywhere. There's a demand for it, just like there is for cable television. I'll never go back to broadcast radio as long as satellite is available.

* Your stations follow you wherever you go, as you travel.
* Commercial interruption is minimal, and talk is virtually nonexistent. It's ACTUAL MUSIC on the music stations.
* Niche programming and music unavailable anywhere else can be had on satellite.
* The signal is better (except through tunnels or in your garage, but that's no big deal).
* And on and on.

I paid in the range of $300 for a three year contract. That's nothing, compared to what I've gotten out of it. I love it.

[viewtifulmom]

XM messed up when the merged with Sirius. Sirius was already in trouble and XM's stock seemed to be doing ok at least compared with Sirius.

The FCC actually is why they are in such trouble, the merger was delayed a year and a half.

They (SIRI) are currently trading at .055 a share...ouch

[modeps]

The FCC actually is why they are in such trouble, the merger was delayed a year and a half.

They (SIRI) are currently trading at .055 a share...ouch

I'm glad I sold when I did... back when it was around $5/share, which was a drop from where I bought it.

[Roc Ingersol]

Kramer's either malicious or an idiot.

I'd sooner trust facts from wikipedia and stock tips from a monkey.

[ElektroDragon]

Maybe now we will finally get FREE satellite radio.. Wouldn't that be nice??

[Gott]

Maybe now we will finally get FREE satellite radio.. Wouldn't that be nice??

sure and so would getting free video games...neither is going to happen.

I guess you don't understand how bankruptcy works. If GM had to file bankruptcy would we get free cars? NO.

I'd make sure you understand the topic before you write in the future. Let's keep the boards on a somewhat intelligent level huh?

[ElektroDragon]

sure and so would getting free video games...neither is going to happen.

I guess you don't understand how bankruptcy works. If GM had to file bankruptcy would we get free cars? NO.

I'd make sure you understand the topic before you write in the future. Let's keep the boards on a somewhat intelligent level huh?

You're the one who lacks intelligence! If the saterllite radio band cannot turn a profit, it will eventually become a public band or become advertiser supported, like AM or FM radio. Hell, the FCC might even get involved and sell off a portion of the spectrum to advertising based companies and reserve some for "public satellite radio". THAT'S what I was alluding to. Looks like you're the one not looking ahead to any and all possibilities. Next time THINK before assuming I'm a dumbass, eh? :mad:

[Fubl]

thats the main problem no average person knows what bankruptcy is. It doesnt help the companies when the media is inforceing "oh this company is going bankrupt stop spending money/using services till they are liquidating then spend"

One of the best bankruptcy stories i can think of is early 90s marvel comics. They were bankrupt sold shares off to Toy biz. When marvel pulled them selves out in the end they actually bought out the company that had bought the shares in their company. Now look at where they are today.

[Flatpicker]

thats the main problem no average person knows what bankruptcy is. It doesnt help the companies when the media is inforceing "oh this company is going bankrupt stop spending money/using services till they are liquidating then spend"

One of the best bankruptcy stories i can think of is early 90s marvel comics. They were bankrupt sold shares off to Toy biz. When marvel pulled them selves out in the end they actually bought out the company that had bought the shares in their company. Now look at where they are today.

I understand that. But I still have reservations about using bankruptcy as a financial tool like this.
Both companies had a P and L statement to be examined. If the numbers don't look good, you don't merge then attempt to go to court to renegotiate your terms with your lenders.

Doesn't seem right as a ethical business practice.

[Fubl]

id rather see a true chapter 11 than what alot of these places are doing and holding out their hands for the government cheese. some of these companies are not doing anything to help themselves while they have their hands out increasing their debt even further.. at least with a true chapter 11 some of the debt is actually repaid....

[DCIII]

i still can't believe that people pay for radio. wow. nickel and dime you to death. i have over 600 original cd's and make all kinds of greatest hits cd's. i wonder when good music will come back. i think the last cd i purchased was a tool cd 5 years ago.....:)

Nothing says, "Hi, I'm in a same sex relationship," quite like a man driving a Miata... True story.

[Tralfaz]

You're the one who lacks intelligence! If the saterllite radio band cannot turn a profit, it will eventually become a public band or become advertiser supported, like AM or FM radio. Hell, the FCC might even get involved and sell off a portion of the spectrum to advertising based companies and reserve some for "public satellite radio". THAT'S what I was alluding to. Looks like you're the one not looking ahead to any and all possibilities. Next time THINK before assuming I'm a dumbass, eh? :mad:

Unless the government bought the satellites that Sirius and XM own they wouldn't be able to do this. The FCC doesn't have the right to "sell" satellite signals. The more likely scenario would be some other company buying the satellites and either taking over satellite radio, or just repurposing the satellites for something else.

Of course, the way things are going with government these days you never know. Maybe they would just declare imminent domain and confiscate the satellites for "public use".