Your Predictions on the (rumored but reasonably inevitable) Sirius/XM bankruptcy?

[Mike 03]

Big surprise--not.

These technologies have wowed me from day one and I have multiple subscriptions to both. I even (stupidly) own Sirius stock, which I purchased at a buck seventy five a share thinking that it had to rebound above that level. (What is it today? Six cents?)

This situation concerns me much more as a fan and avid supporter of the companies than as a shareholder. SIRI will probably declare Chapter 11 bankruptcy in the near future, which symbolically signals "reorganization." If we are fortunate, the technology will survive in some capacity. But in reality, a lot of companies that initially file Chapter 11 reorganization eventually (or even quickly) collapse into liquidation. Didn't either WorldCom or Enron file Chapter 11?

What do you think is going to happen to Siriius/XM and, more importantly, what do you think will happen to the highly paid talent like Howard Stern, Martha Stewart and Oprah Winfrey who have drawn so many people to these technologies? It's a Catch-22. Doesn't Howard (who is the reason I got Sirius to begin with, because I preferred XM initially) represent nearly one-quarter to one-eighth (at $500 million/five year) of the entire debt of the combined entities? On the other hand, he is probably responsible for ten to fifteen million of the subscriptions to begin with. I have no clue how much Oprah and Martha Stewart receive. I've heard Oprah receives fifty million. Depending on who you believe, the Siriius/XM debt is $2 to $4 Billion, and the company is worth an estimated $200 million. The math makes it impossible for this company to survive in its current state, unless I'm missing something gargantuan.

But this is a rather bizarre consideration: Between Sirius and XM, there are five (or six?) satellites orbiting the planet now for these two stations? That's a pretty big investment.

I am hoping SR can survive, but I'm interested in what others are thinking about this situation.

Might someone come in a rescue it?

This situation, for those of us who have believed in this technology, is a bummer.

[JuniperLea]

1. You weren't stupid...

No one could have anticipated... you know.

[Ex Lurker]

2. Hopefully they'll ditch most of that overpriced "talent"

and keep the music channels, plus syndicated programming like ESPN and CNBC. They can also move out of their pricey digs in the Trump Tower, and find cheaper real estate somewhere. I think in the long run, streaming WiFi will kill their business model, but large swathes of the country don't have it yet.

[Mike 03]

13. The syndicated programming is really good. The news and business coverage is

excellent, and both entities have medical stations as well that are astounding.

Also:

POTUS on XM
CSPAN on XM
Bloomberg on both
CNN, BBC, etc... on both.

[liberal N proud]

3. I have been contemplating buying a satellite radio

But now I have to wait and see. Will there even be a satellite radio to broadcast the signal?

We travel long distances quite frequently and the convenience is huge.


As far as predicting what will happen to Sirius and XM, I think at the last minute someone like Time Warner or Comcast will swoop in and snap up the pair at bargain prices.

[Mike 03]

14. Comcast might be an excellent partner. They already have the largest subscription service

in the world, according to (that infallible resource) Howard Stern.

[AngryAmish]

4. The sats are up there

Someone will use them. However the sunk cost is sunk. Someone will buy it on the cheap, get rid of the expensive talent (oh no! not Gayle!) and do robo-programming. 24 AC/DC channel (which should be a permanent thing), baseball et al.

Price is too high for advertising support. Drop the price and maybe I'll buy. I'll pay $35 a year.

[Mike 03]

17. Interesting post. I hope some reps from the company see what you are saying about

the price.

Would it bother you to hear ads during the programming?

Would accept paying $100 less a year to put up with ten to fourteen minutes of advertising an hour on the channels?

Interesting.

Thanks for provoking some questions.

[Missy Vixen]

5. I really enjoy Sirius

Mostly, I listen to Sirius NFL while I'm working. ;-) Gotta' keep up with the NFL.

I hope they find a buyer, because I think they're a great alternative to five commercial blocks an hour.

In the meantime, I'm sure they never envisioned what's happened in the past year.

[Mike 03]

18. Absolutely. That is a huge reason they are unable to negotiate refinancing I'm sure.

Just as I was typing this, I heard on the Stern show that the debt is actually $4.5 billion, not $4 billion.

[zagging]

6. From what I've been reading, the tech is obsolete

Who needs the expensive big iron birds when wifi and 3G are coming everywhere, so I'm told.

[DJ13]

7. Bankruptcy is just a business decision

It lets them renegotiate loans on better terms.

Its okay for businesses with billions in debt outstanding to stiff creditors, unlike the average person who has to jump through hoops naked to file to get out of a few thousand dollars in debt thanks to Congress

[AndyA]

8. They're going to have to streamline.

Dump the expensive "talent." If they were worth what they're being paid, Sirius/XM wouldn't be in trouble.

They made a big mistake by dropping channels late last year, and lost a ton of subscribers due to that action. A few of those channels are back, but a lot of their customers haven't returned, from what I hear.

[madaboutharry]

9. I listen to Sirius and XM all day.

I have Sirius in my car (that is what it came with) and XM in my house. I would really miss it if I couldn't listen anymore. I hope they get their act together.

[Atman]

10. I love my satellite radio.

I NEVER listen to over-the-air radio anymore. It's either internet radio or Sirius/XM online while at work (or my iPod), or Sirius/XM in the car.

I'm actually getting hosed...I have full-price subscriptions to both services. My wife's car has an add-on Sirius radio (awesome...it also snaps into a boom-box), and my car has a factory XM radio. Instead of getting the break for a second subscription, we pay full for each.

.

[Best_man23]

11. Me thinks they are going to be bought up.

Dish TV or perhaps a media company like Apple will get them on the cheap.

[Still Sensible]

12. I've got XM and really questioned the Sirius merger from the

beginning on two fronts: First, combining the two seemed to me would remove any and all competition and I wondered how is that not a monopoly; and second, I knew the talent baggage that Sirius was bringing to the marriage.

[crimsonblue]

15. I wouldn't be surprised if Warren Buffet bought controlling interest

He loves buying stuff on the cheap, and he could demand very favorable terms. Also, the guys got more money than God (although is he is donating all of it to the Bill Gates Foundation).

[Beetwasher]

16. I'm Hoping It's A Bargaining Strategy

I'd miss my Stern in the morning and to have my stock be worthless would really, really suck, big time.

[marybourg]

19. I loved my XM when they had an African music channel and

a World Beat channel. When they dropped both of these in favor of still more commercial-style music and then my 3 yr old $200 home receiver stopped working, I dropped them. I would pay $35/year with a free receiver to re-subscribe, but not more.

[Xolodno]

20. Methinks

Echostar is going to eat them since they owe them the most.

They've got a flawed business plan that way under utilizes their potential. Their using "hype" of technology to push people into it and made terrestrial radio their enemy when they should have made it its bitch.

They should have allowed "free" radio time for everyone that bought one of their radio's. Of course it would have been with commercials, but if your on a long road trip your not a slave to local towers. Also they should offered to "simulcast" terrestrial radio stations nationwide...for a fee of course from the station. Someone vacationing in Florida who needs his fix of Kevin & Bean on KROQ (So Cal) could get it....and the radio station establishes a national presence.

Then of course you offer "premium" packages where you pay for commercial free music, specific talk radio and other specific content (press the volume up button if you wish to buy a 4-hour block of Playboy radio *moan*)

The infrastructure is there and whoever gets it is going to buy it on the cheap. And perhaps dare I say, a better plan.

[MADem]

21. Maybe they could try to go to a network TV business model?

Partner with car companies to distribute the technology, sell the home units for cost plus not much markup, sell ads, and go commercial...stop charging people to LISTEN to the fucking RADIO. To me, it's ....un-American!!!!!!

I have tried out that technology in rental cars, and to be entirely honest I wasn't "wowed." It was nice to have the variety, to be able to listen to comedy while driving on a long trip, for example, but you can get interesting radio on the short wave at home, or on the internet, and in your own car, you can get one of those plug in kits for an iPod that you play your own music through your FM radio. It just wasn't worth the money to me, to be honest. If I were a truck driver I would surely have a different attitude. However, I don't live in my car, and that's where I'd avail myself of it.

[Edweird]

22. Sirius has some good metal/thrash and electronica channels. XM sucks.

I couldn't care less about 'personalities' line Stern or Stewart. Broadcast radio is lame-o as well. I guess that's why my MP3 collection is so massive.....