US satellite radio firm SiriusXM has revealed that it is writing down the value of Pandora, its music streaming subsidiary, by around $1bn.
The news came in SiriusXM’s announcement to investors of its expectations for 2021 under newly-installed CEO Jennifer Witz. “In connection with its annual impairment assessment of goodwill and other indefinite-lived intangible assets, the company expects to conclude that an impairment is necessary related to the Pandora reporting unit,” explained SiriusXM. “The company estimates, based on information available to it today and assumptions that it believes are reasonable, that the impairment of goodwill and other indefinite-lived intangible assets could be approximately $1.0 billion. The expected impairment is a result of the anticipated operating performance of Pandora, primarily its royalty cost structure.”
In the first nine months of 2020, Pandora generated revenues of $1.14bn, with ‘revenue share and royalties’ costs of $665m.