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Bankruptcy possible for Sirius XM

by on12 February 2009

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Trying everything possible to avoid it

It seems that all of the bellyaching by the terrestrial radio industry caused so many delays in the merger and dealt a blow to Sirius XM that could lead to its filing for bankruptcy. Reports say that the combined company has $175 million that is going to be called due next week; and while the company has over $5 billion in assets, it is carrying a $3.25 billion debt load, as well.

Some are suggesting that while subscriptions are up and the company is moving in the right direction, bankruptcy may be a way for it to be able to renegotiate some of those contracts for talent and content that both companies were paying too high a price for when the battle between the two satellite radio rivals was raging.

The current tightening of credit availability has left Sirius XM with very few options, but Charlie Ergen of EchoStar fame has an offer on the table that would allow him to get control of the company. Some say that current CEO Mel Karmazin needs to go and they need to bring someone else in, but the reality is that he Karmazin helped get satellite radio to where it is today; and we do think Sirius XM will survive, as the company has over $5 billion in assets, including multiple satellites. The only real question is who will gain control of the company and what its future will be.
Last modified on 12 February 2009
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