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 against it.
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…
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