Feeds

Last US sat radio gang mulls bankruptcy

Tits nearly pointing skyward

The essential guide to IT transformation

Sirius XM, the remaining satellite radio broadcaster in the USA, is reportedly considering filing for chapter 11 protection from creditors as it becomes unable to service its huge debt.

Unable to make debt repayments of $175m, due at the end of the month, the New York Times reports, Sirius XM has taken on advisers to help consider the second largest bankruptcy filing of the credit crunch - $5bn of assets and millions of customers, but enough debt to run a small country.

The $3.25bn debt isn't a surprise. Launching satellites is hugely expensive and long-term debt was part of the business plan. But that debt was expected to be serviceable thanks to the cheap credit that has now all but disappeared from the financial markets - leading to the collapse of the Sirius XM share price, which stood at 11.4 cents on Tuesday.

The credit crunch has also slowed sales of new cars, some of which are fitted with a Sirius XM radio on a revenue-sharing deal with the manufacturers. Even where people are buying new cars they are selecting their options with care - and satellite radio isn't a priority.

Sirius XM has gained some listeners and has a big enough customer base to mean that bankruptcy won't lead to dead air. After all, the satellites are already up there. But those customers were gained by recruiting star talent, at star-talent rates: $100m a year for Howard Stern over 5 years, $30m to Martha Stewart, and $55m to Oprah Winfrey's Harpo Radio Inc. Bankruptcy would negate those deals, allowing Sirius XM to renegotiate or walk away, assuming their listeners would hang around for the ambiance.

The company could end up in the hands of EchoStar, who already own much of Sirius XM's debt, or could refinance through other means. ®

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
prev story

Whitepapers

A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.