Sirius XM Won't Be Caught in Big Three Pileup

The woes of automakers have been so pronounced that chief executives of the Big Three appeared with hat in hand in the nation's capital last week to request $25 billion in aid. Democratic leaders now want the three automaker heads to return in December armed with a better plan of how a Congressional bailout could save their companies.

But while monthly auto sales have continued to show a rapid drop, demand for cars in the U.S. still exists, almost guaranteeing that some quantity will be sold. While vehicles may not necessarily be sold by the Big Three, Sirius XM has relationships with every automaker. If credit conditions improve, it will likely usher in a round of buyers that were previously unable to secure a loan for an auto.

"The mix of who sells those cars and the financial ownership is much less important," says Ratcliffe. "As long as cars are getting sold, it doesn't matter who's selling them. So long as there is demand and somebody is making cars to put satellite radios in, there will be a business."

Even if Ford or GM filed for Chapter 11, the revenue stream from autos they sell would not necessarily come to an abrupt end. Sirius XM is essentially a vendor that pays cash to the automakers for a share of the revenue, unlike Visteon (VC Quote), Lear (LEA Quote) or American Axle & Manufacturing (AXL Quote). In the event of a bankruptcy filing, it's likely the automaker in question would leave the relationship with Sirius XM untouched as it would continue to generate cash.