Sirius XM Radio Preparing for Bankruptcy?
The satellite radio giant has reportedly hired a law firm to handle its Chapter 11 filing.
The speculation continues to grow about Sirius XM and a potential bankruptcy filing.
The satellite radio company has hired advisers to prepare for a possible Chapter 11 filing, the New York Times reports. Without getting too financial, Sirius XM is $3 billion in debt, of which $175 million is due at the end of February.
So what does a looming bankruptcy mean for subscribers? It doesn’t appear as though customers will immediately lose service. But the big names - Howard Stern, Martha Stewart - will likely be forced to take pay cuts or be released from their contracts. How a company that’s never turned a profit can afford to pay Stern a reported $100 million per year is beyond me.
Sirius XM may also renegotiate its deals with Major League Baseball and the automakers, reports Business Week.
Either way, reducing the number of channels will not go over well consumers already upset with higher subscription fees.
EchoStar has reportedly been buying up Sirius XM debt in a bid to take over the company. The set-top box manufacturer might finally get its wish.
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