Satellite radio companies XM Satellite Radio Holdings, Inc. (NASDAQ: XMSR) and Sirius Satellite Radio Inc. (NASDAQ: SIRI) have continued normal operations as they await the approval on their proposed merger. The stocks, however, declined some 30% since the merger announcement. Although many knew the regulatory approval of the only two satellite radio companies would not be easy, faith in the approval seems to be going lower every day, affecting the share prices of both companies in recent months.
Isn't a merger agreement supposed to hike share price instead of sinking it? Generally, this happens, however, when it involves telecommunications and a threat of possible market monopolization, then the reverse happens. Although, when I liveblogged Sirius's latest quarterly results, CEO Mel Karmazin sounded supremely confident that the merger process would be approved after just a few more roadblocks. Potentially myopic investors don't agree, apparently.
I don't think that this merger is violates antitrust regulation. While it appears that way from the single-minded antitrust regulators, consumers today have more choice on in-car entertainment now than ever before. FM stagnation getting you down? Use that "auxiliary input jack" on most new vehicles and listen to anything from your MP3 collection. Older car? No worries, use and FM transmitter. Still like terrestrial radio? Get HD Radio for those FM broadcasts with CD quality. Antitrust concerns here? Unless you can only use satellite radio (for some odd reason), it's highly doubtful.
Last updated: February 13, 2012: 03:06 AM
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Reader Comments (Page 1 of 1)
5-18-2007 @ 11:02AM
EMIL J KOVACH JR said...
More Than Just A Business Decision, This Merger Has always Had HUGE Problems With The Concept Of A New Market For Un Censored Content, And News + Information Being Controlled By One Owner.
As More Adult Intended Content (Opie And Anthony, Howard Stern, Hip Hop Lyrics, Etc) Has Entered The Main Stream, The FCC Had the Far Sighted Vision To Open Up A New Set Of Frequencies For A Haven For This Material, And Content Proving Ground.
A Place To Let This Form Of Entertainment Have A Broadcast Place--Rather Than No Place At All.
But Competition Is Still Needed To Provide A REAL Market PRICE For Both The Subscription Fee, And VALUE Of This To A Market, A Market Being More Than One Buyer, Or Subscriber Choice. Or One Owner.
Remember--These SATRAD Providers Have Sea To Shining Sea Coverage Ability Potential--Nation Wide.
With Un Limited Growth Potential, The Product Has Been Described As "The Fastest Growing Radio Concept In History" By Mr Karmazin, Himself.
A Few Very Rough Years Ahead? Probably--But NO EXCUSE For Consolidation, It Still Is The ONLY Market Were UN CENSORED CONTENT Is LEGAL.
No Match For Regular Broadcast Bands.
The FCC And Others Are Very Concern About one Owner Having Sole Control Over News And Information To This Market.
Estimates Of 30 Million Subscribers--For Both, Is Not Un Realistic, In A Few Years.
Menu Driven Programming, And Better Choice Of What You Pay For Will Enhance Both Thier Models.
But All This Is On Hold--Till The Merger Question Is Over.
The Future Is Very Bright For SATRAD.
True Competition For Content, And Menu Driven Content Is The Real Answer Here.
Leave This Market Alone, And It Will Become An asset to Broadcast Radio, Not One Man's Kingdom, As Mr Karmazin Wants it To Be.
The Public Has Made It Very Clear To the Legislators--They Want TWO PROVIDERS To Choose From.
EMIL J KOVACH JR
5-18-2007 @ 11:14AM
Tony said...
HD Radio is having major problems with consumre acceptance:
“4/4/07 - FCC: Market to Decide Fate of HD Radio”
http://www.diymedia.net/archive/0407.htm
“Sirius, XM, and HD: Consumer interest reality check”
“While interest in satellite radio is diminishing, interest in HD shows no signs of a pulse.”
http://www.hear2.com/2007/02/sirius_xm_and_h.html
"U.S. automakers not jumping into HD Radio"
http://www.reuters.com/article/ousiv/idUSN2632750220070427?pageNumber=1
"Bridge Ratings: Sweat the cell phone and don't count on HD"
"In other words, Bridge says interest in HD radio is decreasing even as your station works hard to increase awareness. What can I possibly add to this honest and bleak picture that I haven't said before? My well-intended warnings about HD's "premature death" seem to be rearing their ugly heads almost two years later."
http://www.hear2.com/2007/04/bridge_ratings_.html#comments
"But is 'availability' of HD radios the problem?"
"And one broadcaster reported to me that he asked an iBiquity rep how many HD radios had actually been sold as of the most recent accounting. And this was his answer: 150,000."
http://www.hear2.com/2007/04/but_is_availabi.html#comments
5-18-2007 @ 11:22AM
Steven said...
Emil, your comments, other than being hard to read because of the formatting, are off base. Who censors your iPod and internet radio streams? Besides, uncensored content is a substitute for censored content, and vice versa, and does not fall under monopolistic conditions.
You have a lot of unfounded rants. Where is the reference to the public wanting 2 providers. I am part of the public and have no problem with the merger. It makes sense.
5-18-2007 @ 3:36PM
EMIL J KOVACH JR said...
Opie + Anthony, Howard Stern And Imus, All Worked For Mel Karmazin At One time.
Both Howard And Imus Do Credit Mel with Their Success By His Syndication, On Broadcast Radio.
Opie + Anthony Are A Product Of Broadcast Radio.
IF Howard Leaves Sirius Tomorrow.
Where, Exactly Can They Be Heard?
No Broadcaster Can Carry Their Show, Because Of Content.
They would Have To Highly Edit their Content, And It Would Not Be The Same Show.
Internet Radio Is, At this point A Financial Failure, Will Continue To Be, Because Music License Fees, In Almost All Cases, Is More Than Total Revenue Of Any Internet Station,.Has Ever Collected.
As Per the New Rates Now in Force.
Any Existing Internet Radio Now On line,Is Subsidized By A Parent Company. Or Illegal.
So Where Can these Artists Go?
If SATRAD Is owned By One Owner--And they simply Say"Sorry--Too Controversial"
What Other Provider, Or Broadcaster Will Hire Them?
IPODS?
EMIL J KOVACH JR
5-18-2007 @ 7:00PM
Bob La Rocca said...
Emil,
It's too bad that in our time we can't let business higher ups control their own companies. If two businesses think it would be benificial for the companies and its share holders to merge, then why is that the holier than thou political hacks have the authority to beat them down instead of pushing for success?
5-19-2007 @ 8:43AM
Emil J Kovach Jr said...
We Are Talking About public Air Waves, Not Barrels Of Oil.
If these "Business Higher Ups" Can Not Take A License They Bid On--And Make A Profit, Because An Exact Other License Is Competing In A Manner That Is VERY Competitive, Is The Answer To Buy That ONLY Competition? And Control The Price Paid For Content?
If You Think Internet "Streams" Are The Answer--Well Give it A Try--
You will Soon Find Out, SATRAD And The Internet Have Nothing In Common, See If You Can Get An Internet Only Subscriber To Pay The Same Price For the Same Programming--And Pay The License Fees To The RIAA, And Make A Buck.
So Far, NO ONE On The Internet Wants To Pay For ANYTHING.
The Internet Broadcasting Is A Different World Of Radio wannabe, And Regular Broadcast Is Subject To Family Values Rules.
So COMPETITION IS Needed In The SATRAD WORLD, Piss Poor Management Need Not apply.
One Owner, Is One Opinion As To Programming, News Content, Information Content, And Music Content.
And For Content Providers Like STERN, OPIE + ANTHONY, IMUS, Other ADULT THEMED Comedy Shows Or Channels, That Means One Choice As To What Appears On The SATRAD Dial.
I Find No Benefit To A Subscriber As To Choice.
300 Choices From The Same Owner, Is No Real Choice.
EXAMPLE:
Just What If, If, A Religious Broadcaster Had the Means To Buy Out the Sole Owner.
Do YOU Think The Programming Would Change?
EMIL J KOVACH JR
5-23-2007 @ 10:53AM
EMIL J KOVACH JR said...
FROM THE WEB--- SIRIUS IS DOING JUST GREAT!!!
No Need For Mergers--When They Can Pay CEOs This.
Merger or No, Sirius CEO Karmazin Hits Jackpot.
Posted by Dana Cimilluca.
The last thing Sirius Satellite Radio CEO Mel Karmazin needs is more ammunition for critics of the merger with XM Satellite Holdings that he’s struggling to win approval for. But that’s just what the proxy statement Sirius filed late Monday is likely to provide.
The annual filing discloses a bonus of $3 million for Karmazin last year, on top of a $1.25 million salary and $2.83 million in stock awards. But the number that jumps out is the $24.1 million in options awards, bringing Karmazin’s total pay package for last year, according to the filing, to $31.2 million. Although a footnote notes that the option number includes spillover from awards granted before 2006, in this day of outrage over executive pay, critics of Karmazin, his company and his deal will probably fixate on it.
Indeed, this isn’t shaping up to be a great week for Sirius and XM. Yesterday, bearish comments from Banc of America on Sirius and XM’s business prospects sent their shares into a further tailspin, down 6% and 3%, respectively.
And today, more fodder for critics of the merger (mainly lawmakers, rivals and consumer advocates), as Bloomberg puts a spotlight on XM’s use of unauthorized antennas, an issue Representative Edward Markey of Massachusetts has said should be a consideration as regulators debate whether to let the deal go forward.
5-23-2007 @ 2:07PM
kevin said...
maybe if you take out all the grammatical errors in your story people would heed your advice....learn how to write before giving advice....what a joke!
7-08-2007 @ 3:25PM
gunther said...
Hey Emil,
Shut up already!
Your shilling for terrestial radio is simply pathetic. If it is so superior to satellite, then the XM/Sirius merger should be no threat.
And in case you missed it, yes, shut up.
kthxbye