The day the music died is coming to a satellite radio near you, and no, we're not talking about a new Don McLean song. Just as we witnessed L.A.'s FM Indie radio station, 103.1 disappear from airwaves a month ago, it seems as though satellite radio isn't doing much better, as the popular -- and industry leading -- satellite radio company, Sirius XM Radio, is preparing to file bankruptcy.
The company, ran by the witty Mel Karmazin, has enlisted the help of lawyers to prepare for a Chapter 11 filing. Sirius XM's bankruptcy filing would be in second place for largest Chapter 11 filing this year (the filing by Smurfit-Stone, with assets of $7 billion, has been the year’s biggest to date). The company has found itself masked in debt, after being unable to create profit and gain users despite teaming up with car makers and big name celebrities.
According to the New York Times, EchoStar, the TV satellite company, could possibly take over Sirius XM, and buy up their debt, but Charles W. Ergen and Karmazin apparently clash on some of the details, which could cause complications for the takeover.
A portion of Sirius' failing profits could be attributed to the automobile industry's lowering economic status as well. Sirius XM invested money in installing satellite radio units in cars, but with economic strife effecting the number of car sales and customer's ability to spend more money, the satellite radio company has seen very little recent turnout from this investment; creating an epic flop rather than financial increase for the company.
So what will happen to those users who have spent their money on their fancy Sirius receivers and depend on it's airwaves to get through the day? Most likely service will run as usual, but as the New York Times reported, big name stars like Martha Stewart, Howard Stern, and Elvis Costello might be finding their contracts with Sirius canceled, because they just cost too much money. Sad news for listeners, but the hope of an EchoStar takeover could mean that positive changes could be made to the user friendly radio system to ensure its longevity.
Sirius XM radio is not the only arts-promoting company suffering from the economic fail occurring right now. Just last week a Senate amendment to the recovery bill was passed that won't protect museums, theaters and arts centers "to ensure that taxpayer money is not lost on wasteful and non-stimulative projects," according to The Daily Swarm. We want to know when the arts became wasteful and non-stimulative... especially since "the arts" means 5.7 million jobs, and a $166.2 billion economic impact upon Americans.
Perhaps this could just be a fluke, like in 2002 when rumors about the probability of Sirius radio's downfall heavily ran rampant. The company managed to pick itself up that time via a merger with the then-separate XM, but unfortunately things aren't looking so good these days.