According to an article in the Star-Telegram, there are rumors that Sirius XM Radio who has over 20 million subscribers is preparing for bankruptcy as they struggle to pay off $175 million in debt due this week. Many analysts predict bankruptcy for the radio satellite provider whose merger with XM was mired in controversy and who has yet to make a profit since its inception.

And to make matters worse, Sirius XM’s subscriber growth has steadily declined since the economic crisis began, making many lenders wary of lending the company money. The lender wariness is making bankruptcy more likely for Sirius as the debt payment deadline looms nearer.

Usually, during an economic downturn economically viable entertainment companies are spared bankruptcy; but not always. If Sirius XM does go into bankruptcy we can take it as a bad omen for other entertainment companies (especially small/medium sized) who are on shaky ground.

One of the casualties overlooked by lawmakers and some economists during an economic downturn is that when many small and medium sized companies get hit with bankruptcy, they push thousands of workers into unemployment which has a chain reaction often causing foreclosures and bankruptcies concentrated in that company’s city.

But not just that, they also leave gaping holes for the consumers who depend on the company’s service, especially when the company has a monopoly. Workers at small and medium sized companies need to keep their eyes peeled for rumors of bankruptcy and job losses, the risk those events happening often won’t make it into the papers beforehand, so you have to be aware and prepared.

(sources: Washington Post )