• Mar 13, 2008


It seems like forever ago when rumors started about a merger between Sirius and XM satellite radio. The rumors were made slightly more official when the two companies announced the "merger of equals" last year. Where have we heard that before? Nobody expected this $4.2 billion transaction to be a sprint, as there are laws with tall hurdles designed to govern this type of business deal, but this conjunction has creeped like an overloaded Tercel up a steep grade.

For more than a year we've been sitting around watching these two companies as they worked on securing shareholder approval (accomplished in November) and the endorsement of regulators (um, not yet). Now we're getting word from Sirius CEO Mel Karmazin that there may be an end in sight. During a talk at the Bear Stearns 21st Annual Media Conference, Karmazin said he "took heart" in recent FCC comments that mentioned that the body aims to rule by the end of March. "The fact that it has lingered this long, it has been interpreted... as good news," Karmazin said. Gary Parsons, Chairman of XM Satellite Radio, added that he was also confident the Department of Justice and the FCC were moving forward "...in a timely manner."

With satellite radio in need of some more customers, let's hope they can quickly put this merger in the books and focus on more important issues like signal reception and more varied content.

[Source: Automotive News, subs. req'd]



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    • 1 Second Ago
  • 16 Comments
      • 6 Years Ago
      "varied content"

      boy, I'll say...

      I love this commercial free radio, and wouldn't give it up, but come on, with all the songs ever recorded, how come I keep hearing the same stuff over and over ?????
        • 6 Years Ago
        Have you ever made a request? I do it all the time (Sirius) and they do tend to play them.
      • 6 Years Ago
      XM already has stated that should the merger not succeed, it has the means necessary to remain afloat and viable on it's own. Personally, I'm anti-merger. I believe allowing the two companies to merge will create LESS variety and LESS choice for the consumer. Should the merger go thru, you can expect to see a combination of resources happening, which will in turn lead to less station choices.

      Some of you may say "well of course you'd combine two 80's stations or two 90's station"Not good, the stations on each service are vastly different in terms of how each "sounds". A combined XM/Sirius would focus in on one of those choices and eliminate the other. Who will get a say into what stays and what goes?? If you said "the consumer" you'd be wrong. The consumer will be forced to listen to whatever stations are left, which might not be what they signed up for to begin with!

      As far as the sports go, I believe that the two companies should work out a mutual agreement in lieu of a merger whereas they both get to share the various sports packages. That way the cost burden is divided between the companies. Consumers should then be allowed to choose which sports package they wish to include in their basic monthly fee and for an extra fee(s) they can choose additional/all packages. These fees are divided equally between the companies thus allowing them to pay the high costs associated with those sports packages. It's a win-win situation. This would in turn force the two companies to compete via other means, such as big name DJ signings and other various exclusive programs.

      • 6 Years Ago
      Whether an industry "is a necessity" has no implications in anti-trust and anti-monopoly laws AFAIK. By definition this merger would create a monopoly just as if all of the satellite TV providers were to merge.

      And of course that Exxon/Mobil merger resulted in lower gas prices for the consumer?
        • 6 Years Ago
        "By definition this merger would create a monopoly just as if all of the satellite TV providers were to merge."

        Not necessarily -- it's all in the definitions of the marketplace, which has been the crux of this merger battle.

        If, for example, you look at Sirius and XM as the only two competitors in a single market called "satellite radio," then, yes, this a merger will permit a monopoly of that market.

        If, on the other hand, you look at Sirius and XM as two of many competitors vying for the "portable music" market, then the merger only creates a stronger competitor for FM, HD Radio, Apple, etc.

        Given how cars have increasingly developed multi-media systems with ample choice these days, I think the latter analysis is more forward thinking. It's concievable that within 5-10 years cars will be able to stream music directly from the internet via wireless/mobile networks, so satellite will just be another form of mobile music.

        The same goes for satellite TV -- it is only one competitor which includes cable, TV over IP (things like FIOS) and video on demand/rental from Apple and others. markets are changing so fast that they are becoming difficult to define. I think the FTC would do well not to try to impede the resulting, inevitable competition and shake-out.

        -SimianSpeedster
      • 6 Years Ago
      The Bush administartion will allow this to go on. They have had a hand off policy as far as big mergers go.
      • 6 Years Ago
      This has taken way too long! The NAB has the ear of too many Congressmen and Senators as well as the FCC it's self.
      • 6 Years Ago
      If the merger goes through, I'll probably cancel my subscription.

      Right now, XM and Sirius have to compete against each other, so they are both pretty good. After the merger, the only have to compete against FM. FM sucks, so they will have to only suck slightly less.

      Expect less, not more, varied programming, since FM already has much, much less. Expect many more commercials, since FM has extremely many commercials. Expect higher prices, since there will now be only one, not two, alternatives to FM.

      I understand they need this merger financially, although it's a bit hard to feel sorry for a company that's losing money while paying Howard Stern $100,000,000 a year.

      I hope the merger is rejected, although it probably won't be.
        • 6 Years Ago
        That would normally be true, but remember, satellite radio in general has to still suck _significantly_ less than FM for people to want to actually pay $13/month for it. It's hard to act arrogant when competing against free.
        In this case, consolidation keeps things simpler and gives consumers peace of mind they're not missing half the picture. Go, merger, go.
      • 6 Years Ago
      I own Sirius stock and hope the merger is denied.
      XM will be out of business in < 14 months anyhow.

      Re: The delay of the DOJ/FCC, China can pass laws faster than these inept (and probably paid off) bodies.
      • 6 Years Ago
      I hope the rates won't go up.
        • 6 Years Ago
        Ok
        • 6 Years Ago
        They could actually go down because they will be sharing costs. This is not meant to be a full on merger but a medium term partnership to help cover the cost of starting the companies up. The capital needed to launch satellites, hire recognizable DJ's and create the recievers is very high and currently may not paid off for 15 years.
      • 6 Years Ago
      You know...a lot of people say that if they merge then Satellite won't have any competition. Well, Satellite radio is not a necessity...if it sucks, just cancel your subscription and that's pretty much the end of it. After all I still got my ipod to listen to.
      • 6 Years Ago
      Has anyone heard the Jason Ellis show on Sirius Faction 28? The guy is a spaz and its hilarious with a segment call "dude is it gay" where people call in and tell them about what a "friend" did and he'll tell if its gay or not. Its really funny and not done all that offensively.
      • 6 Years Ago
      I'd like to see how this will play out.
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