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Sirius/XM Prepares bankruptcy filing

Stockholders can prepare to be wiped out.

The company certainly wouldn't cease operations immediately. They would likely file chapter 11 first, to seek reorganization under protection from a bankruptcy court. If they are not able to reach a deal with their creditors, the assets would then go up for sale. If this were to happen, Sirius XM could cease to exist by the middle of the year.
 
So much for those "lifetime subscriptions" huh..Jeesh nothing IS as it WAS..now what to do with my factory installed Sirius radio? Any chance that Echostar or someone will take them over? Did the merger start all this?
 
Its certainly possible that the Sirius services will continue to operate -- but its also possible a bankruptcty filing could take a company the way of Circuit City.
 
How large will the bonus be that Uncle Mel's receives from his bedfellows at that radio company he used to work for and still owns large amounts of stock in for single handedly destroying Satellite Radio? I would guess it will be more than enough to cover his losses from owning stock in SiriusXM.
 
Since Echo Star is trying to find Value in Sirius debt, Sirius is threatening a bankruptcy now to play ball. A few facts, Sirius' debt is about 80 cent on the dollar not like a poorly preforming company like Chevy whose debt is near worthless. That is because Sirius is a near profitable company. The media and others seem to like to predict it's demise. But they fail to tell you that Sirius generates 2 billion dollars a year in income. If Sirius declared bankruptcy it would not effect your service. If they did, it simply means they would be restructuring, NOT LIQUIDATION!!! But all they said in their press release was that they were "ready" to declare bankruptcy. They are doing this because it tells everyone that you have two options, deal with us, or we file bankruptcy and you deal with more debt and problems. So it's simply a ploy to force a hand with Echo Star who seems to want to take over Sirius. Of course even if they did take over Sirius, it would not mean much for you. Sirius would not go anywhere. It would still be what it is, a music and talk entity. Sirius' biggest asset is it's 20 million subscribers. A few blogs are trying to say Sirius could be broken up and sold. And that it has no values as such. But reality is equipment alone is worth nothing. It's always about it's subscribers so any notion of breaking up Sirius into parts is ridiculous. There are no parts, it's 2.6 billion dollar baseline yearly revenue is about subscribers. But a bankruptcy does do some good things that Sirius would like to do programming-wise. If it filed for bankruptcy, it could shed some of the programming deals XM made that are not worthwhile for them like the horrible $50 mill Oprah deal. And while some bloggers say it would effect popular programming such as Howard Stern, think about this, Howard is an income generator, one of Sirius' best, so to change terms of his contract would be bad for their bottom line, subscribers. If they did file bankruptcy, Stern wouldn't be affected as I see it. And keep in mind everyone BUT Sirius says they can't pay their latest 175 million in debt payment and balloon payment to Major League Baseball and the NFL. But Sirius never said that. Keep that in mind. Everyone BUT Sirius has told you Sirius can't pay their debt. You hear terms such as "they are up against a wall" and "struggling to meet ". You don't even know if Egan already did a deal with Sirius which is what brought their recent debt down to $175 million. Only Sirius knows the truth there. No one knows what Sirius is really doing, and Sirius may be deliberately trying to make things seem one way publicly when in fact they actually have a few tricks up their sleeve. And also keep in mind that if Egan did manage to take control of Sirius, not only would he have trouble breaking up Sirius as it's not worth anything as anything but what it is, he'd have trouble actually acquiring it as such. EchoStar made an unsuccessful bid for Sirius last year. That was Sirius' doing that prevented that. But if he did manage to get Sirius this time, it would be more than likely that the government would not allow him to keep it as part of his broadcast empire as he already had a huge TV entity and that would create issues of monopoly. But even if he did take control and it was allowed to go under the Dish/Echostar/Slingbox banner, so what? It's a viable entity that is now near profitable and has an awful lot of subscriber income every year. Sirius is not going anywhere regardless of teh course it takes.
 
I truly hope that SOMEONE with commitment, the money, and the smarts, gains control of Sirius/XM. However, as long as Sirius/XM keeps sending out a signal, I don't care who owns it. I know this probably flies in the face of the discussion and concerns of those who subscribe and are (as I obviously am, based on the comments below) totally put out with what terra/rad is offering. I said it before and I'll say it again:

"I am an XM'r who just recently added Best of Sirius. And I have to say that with the Best package added and a slight downgrade to Family Friendly, I couldn't be happier. I mean, where under the clear blue sky can I have all the music I like, the old time radio, the comedy channels, and darn near (except for a few soccer games) EVERY professional game (BB, FB, hoops, and NHL) played, by EVERY team, EVERY day and/or night, including college games. The PGA, even! PLUS, all the holiday offerings from Christmas to Chanukkah, MIdnight Mass from four major cathedrals, and instant news from around the world from a number of sources. Add to that instant local conditions (which I really needed during a trip over the holidays), and then remember that you never have to search or hope there is something to listen to besides the local farm report and obituaries in a small town in the middle of nowhere.

ALL OF THIS FOR A MEASLY $14.95 a month??

Hell, I don't get that much out of basic cable or satellite TV for three times that amount. And I can't take TV with me, not even my 3" screen color pocket TV now that digital is almost here.
I understand the consternation of some who have been with sat-rad for a long time, really I do. I hate a lot of change made just for the sake of it by idiots who wouldn't know their right armpit from their left big toe even if you provided them with a Gray's Anatomy and a red flag.
However, when I stop for just a minute to consider what I'm getting for such a reasonable amount, I don't feel that I have a lot of reason to complain. Can many of us say that we could/can get even half of what sat-rad gives us from ter-rad, regardless of the market we are in? I live in one of the top U.S. markets, and I will swear to you that I can't get even one-tenth of what my XM/Best of Package gives me. This is a dream come true!!!"
 
Well put, rallen. I agree. I've been mad when they've tossed channels I liked but when we take road trips, the one thing I love is the fact that I'll always be able to hear my stations without loss.

Interesting view, Walter Graff. I can attest that the bankruptcy doesn't always mean complete failure. My wife works for an Airline that filed bankruptcy and withing 18 months turned it around and rebuilt. Still going strong but at a cost, of course.
 
Quite frankly I wouldn't be upset if serious were to go away. I have a problem with the fact that I can't listen to local stations in the non-commercial band as I drive around because ignorant sat-rad subscribers use radios that interfere with local stations. It seems to be a much bigger problem with sirius than with XM. I've never heard an XM channel interfere with a local station. Only sirius channels, 99 times out of 100 its Stern.

I have no problem with Stern, and no problem with Sirius and the whole concept. I do have a problem with the fact that this company sold and distributed radios that cause harmful interference to licensed local radio stations. For that reason I would be happy to see them go away.
 
Actually when both Sirius and XM were fined for having too powerful transmitters, it was then XM that was more the violator. The two companies agreed to pay the fine for the units - XM paid the bulk of the fine at $17 million and Sirius only had to hand over $2 million. But the fact that it so interferes with you shows just how many sat listeners are on the road. On a long distance trip today, I saw car after car with sat radio. Even I got interference for a while while a while back before I switched to a direct connection that offers far better fidelity and eliminates FM completely.
 
XM had many more of the earlier vintage units than Sirius because they had many more subscribers then. Also, a major portion of the fine was because of issues with the terrestrial repeaters (again, with XM having the vast majority), which, by the way, were of a different type of "interference" concern. And finally, the amount and portion of the fines were ultimately pounded/yielded out to enable the merger agreement. It's also interesting that just before the FM transmitter power levels became an issue, the FCC had "revised" it's testing procedure. These were all originally "certified" equipment, afterall.

From the FCC finding that approved the merger...
(mostly as a humorous reminder of the promise to the public and subscribers :p)

- "The transaction will benefit consumers by making available to them a wider array of programming choices at various price points and by affording them greater choice and control over the programming to which they subscribe"
- "There was insufficient evidence in the record to predict the likelihood of anticompetitive harms"
- The companies' concessions must be honored for at least three years; these include a price freeze, a la carte programming, a set-aside of 8 percent of channel capacity to noncommercial and minority programmers, interoperable radios and an open manufacturing standard that allows any firm to make a satellite radio
- The companies can't provide local content
- XM will pay $17.4 million and Sirius $2.2 million in fines for breaking FCC rules regarding broadcast interference
 
The chances of Sirius going dark are more remote than GM vanishing next week. This is a giant game of financial chicken between Mel and those who wish to dethrone him. They will likely prevail at some point and satellite service will emerge from the other side with new shareholders, a new cash infusion and likely new management. Ask anyone who has been around the airline industry in the last five years. The employees got hurt, pensions got trampled and shareholders eaten alive. But at the end of the day the plane was there the next day to carry passengers. Right now I wouldn't invest in any new equipment or sign any new deals with Sirius. Just sit back, enjoy the service for what it is now and wait for the dust to clear.

Strange as it might seem, the best days of satellite radio might be yet to come.
 
Fear not. Tomorrow you will read that John Malone of Liberty Media gave Sirius a bridge loan, taking on the $175 million in debt and will restructure the $600 million that Sirius also has thanks to the XM takeover that comes due in May and December. Malone is a much beter person to deal with for Sirius. As I told you yesterday, fear not, all is good. And Echostar is out of the picture for a takeover, but they may get something else that Sirius doesn't need... anymore.
 
Walter Graff said:
Actually when both Sirius and XM were fined for having too powerful transmitters XM paid the bulk of the fine at $17 million and Sirius only had to hand over $2 million. But the fact that it so interferes with you shows just how many sat listeners are on the road. On a long distance trip today, I saw car after car with sat radio. Even I got interference for a while while a while back before I switched to a direct connection that offers far better fidelity and eliminates FM completely.
Click to expand...

Thanks for the insight. I really don't want sat-rad to dissapear. I think its a good service, and a lot of very talented people work there. It would be a real sham for the service to dissapear.

The interference is still an issue. The FCC fines do nothing to eliminate this interference nightmare. Instead of fining the companies, they should have taken some kind of action to eliminate the interference. That actually might accomplish something.

The radios with the direct connection are absolutely the way to go. These RF transmitting radios are rediculous. I can listen to Howard Stern with few interrumptions by simply tuning to 88.1 which is the default frequency on the sirius radios. I'm not a subscriber, but every day I can catch Stern on Sirius because of these radios. That can't be good for business. From a business standpoint it makes more sense for them to sell more direct connection radios. Plus as you said, the audio is better with the direct connection.
 
Free is good I guess for you. Fear not, Sirius is not going anywhere. It has too much going for it, too many subscribers, and has renegotiated it's debt to give it the life it needs to become profitable. It is nearly profitable now. A pretty amazing feat for a start up that has as few years going as it does. And I too know your feeling. I can hear Howard stern in most places without my receiver installed. It's like everyone has it. Considering Sirius has 20 million subs, it's no wonder why you can hear it off others cars anywhere you drive.
 
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