Clear Channel ruling forces XM to air commercials

Recently, XM Satellite Radio (purveyors of the OEM stereo option available from companies like General Motors and Honda among others) was forced by an arbitration panel to play commercials on four of its channels. The ruling came as a resolution stemming from a dispute between the company and Clear Channel Communications, an XM investor back in 1999.

Motley Fool’s Adrian Rush has an interesting take on the ruling. Why would Clear Channel, who stands to gain little income from the commercials, force the ruling? Clear Channel claims the money is payment for its investment in its successfully offspring.

Rush, on the other hand, thinks the issue is more about market share. He hypothesizes that Clear Channel hopes the action will turn off XM listeners who will then return to “free” radio. Conveniently, the lion's share of terrestrial radio remains controlled by Clear Channel.

More details at the link.

[Source: The Motley Fool]

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