Posted on 11/09/2008 11:03:50 PM PST by Zakeet
Satellite radio company faces $1 billion debt, hurt by lagging car sales
Barely three months after the long-delayed merger of satellite radio companies Sirius and XM, the newly combined Sirius XM Radio is struggling to stay afloat.
The company has just another three months to start paying down more than $1 billion in debt that's maturing in 2009 at a time when credit markets are freezing up. It remains heavily dependent on automobile sales for new subscriber additions just as U.S. car sales are tanking. And its stock price is in a yearlong free-fall that has sparked an investor lawsuit.
For the music industry, the fate of Sirius XM looms larger than before. Under a U.S. Copyright Royalty Board decision made last December, satellite radio broadcasters like Sirius XM pay performance royalties for sound recordings based on a percentage of adjusted gross revenue. That means the better Sirius XM does, the more money labels and publishers make.
That rate currently stands at 6 percent and is set to increase by half a percentage point every year until 2012, when it will reach 8 percent. Neither SoundExchange — which collects those fees and distributes them on behalf of the music industry — nor Sirius XM will reveal exactly how much the company is paying in royalties.
[Snip]
But while the music industry is poised to collect a growing percentage of Sirius XM's revenue, that revenue is in trouble.
(Excerpt) Read more at msnbc.msn.com ...
Sirius XM Radio faces urgent financial challenges, in particular the $1.1 billion in debt that will mature in 2009, about $300 million of which is due in February. That, among other concerns, has caused the company's stock price to fall from a 52-week high of $3.94 per share last December to 26 cents on Friday. Meanwhile, a group of 500 shareholders dubbing themselves "Save Sirius" filed a lawsuit seeking to remove the board and CEO Mel Karmazin.
Some Monday morning good news.
It’s pretty hard for them to compete when there’s so much “free” product available.
They had better save it. It’s the only replacement for conservative talk radio, which is surely going off the air.
As long as they cut in every other tune to adverstise themselves, there is little difference between them and “free” radio.
there is no dinsaur media death watch. This election they have shown there ability to control the populous and brain wash them into submission. they have been crass, bias, forceful and unapologetic. And it will only get worse, this is only the beginning, they will continue to use their power and influence to carry as much water for Obama as they possibly can. And they will hone their skills until Orwell is laughing in his grave.
They would need different satellites in different orbits, and they would need to have receivers that weren’t the size of serving trays.
Don’t sell your stock yet.
If the Fairness Doctrine is enacted, this is the place that will thrive. AM Radio will be the realm of collectors.
Look for a new paradigm...the platform will be anything you want it to be...Sat radio, Ipod, Iphone...toilet seat, whatever.
Not sure how Sirius XM qualifies to be dinosaur since they are supposed to be the future as terristial radio is dying. They did bring us Andrew Wilkow along with a diversity of music channels.
Maybe we all should subscribe in case they shut down talk radio?
Don’t worry - the “fairness doctrine” will give private radio a serious shot in the arm...
If they pass the “Fairness Doctrine” revenues will be a windfall. Pretty sure Rush, Hannity, Levin, the rest of the conservative radio media will gravitate there!
Yes. The “dinosaur media deathwatch” label does apply. For several years, I’ve had a car sound system that would receive satellite radio signals but never subscribed. The local radio station that plays free and low-cost “indy” and other music for us from a nearby peak is just fine. It’s operated by my younger neighbors of various political persuasions, and that’s also fine.
When I rented a car the last few times it had either XM or Sirius installed. On the weekend I listened to Fox News (yeah, I know it’s the newest kick toy here on FR). When I got back to the office I looked them up to see if they served up their channels on the internet, again looking for a feed for Fox or CNN. Nope, no live programing for either of those two. I would subscribe if I could get the cable channels on my computer.
bookmark
I kinda agree. AM is to be dead by December of 2009. Satellite radio will likely be beaming “Radio Free America” across to every home, office, car and tractor in America. By the time you line up the forty-odd national and regional talk-radio hosts who will be switching over...it’ll be a rather large surge in stock price and profit. Find a company that makes personal satellite radios...and put down some investment money into the operation. It’ll double by summer as things start to shape up. They won’t even be able to pump out satellite radios fast enough.
As for AM? Well...I’m guessing fifty will be gone by the end of December 2009. And by the end of 2010, another two hundred. Those who survive....will switch to Spanish language or some other foreign language format. FM will pick up more radio advertisements and likely grow maybe ten percent over the coming year or two. It will be a sad end to AM...which helped the heartland for so many years...before its demise. Hopefully, they can soak the government for bail-out money and then run off to Grenada to rebuild a talk-AM station down there, where talk is still free.
You can get CNN from the Sirius website but not Fox.
Kirby
Oh, well. I guess we’ll go back to playing CD’s in the car.
The Fairness Doctrine will be the salvation of satellite radio as conservative talk radio will need a new home. Rush and Hamnity should make the move before January 20th.
The "Best of Sirius" is not one but TWO channels of Howard Stern, The Martha Stewart Channel, The NASCAR Channel, The Playboy Channel and The NFL Channel with every NFL game being broadcast for a mere $4 extra dollars a month.
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