RealClearPolitics Media Watch

« Stimulating Television Viewing | Media Watch Home Page | Satellite Tug-of-War »

Sirius XM Heading for Bankruptcy?

It looks like the credit market crisis has claimed yet another victim. Satellite radio, in its short existence managed to spend a lot of money but never made any, might not be around much longer.

The New York Times is reporting that Sirius XM Radio Inc., the entity formed when former competitors merged last year, is preparing to file for bankruptcy protection. It will not be able to pay a $175 million debt due at the end of February and may end up being absorbed by creditor EchoStar, owner of the satellite television Dish Network.

EchoStar's Charles Ergen made a bid to take over Sirius XM in late 2008, according to the Wall Street Journal, but was rebuffed. Now, with the company $3.25 billion in debt and credit drying up, the threat of a Chapter 11 filing might be Sirius XM's last chance to reach a settlement with EchoStar.

No matter what happens, one of the biggest losers may be Howard Stern, who took the leap into satellite radio with his record five-year, $500 million contract with Sirius in 2006. He probably won't be able to collect the remaining two years of his deal and his popularity has sagged considerably after he abandoned terrestrial radio.

Some technology proved to be ahead of its time. Some, like satellite radio, became obsolete before it even mattered.