Reuters has written that the progress in the Whole Foods (NASDAQ: WFMI) merger with Wild Oats (NASDAQ: OATS) may be a sign that other mergers being scrutinized by the US government may have an easier time of getting approval. Not likely.
The FTC has tried to block the Whole Foods deal because it may raised the amount that consumers have to pay for organic food. Of course, other food retailers offer these products, so the government's position was probably always a bit thin. The agency went to federal court to try to block the marriage, but was unsuccessful.
Now Reuters is floating the theory that the apparent success of the grocery store merger may make it easier for Sirius (NASDAQ: SIRI) to merge with rival satellite company XM (NASDAQ: XMSR).
The concept is full of holes. Sirius and XM are a de facto duopoly and, merged, would be a monopoly. Their ability to send satellite signals with radio content to receivers is not a business that any other company can enter. That is not really a bit like the Whole Foods situation.
The SIRI/XMSR merger is also a deal that faces opposition in Congress. Legislators want to know why they should countenance a business combination that not only lacks any competing technology but is also one that may use its position to raise rates over time.
The news about the Whole Foods merger may be good for it, but the deal has nothing to do with satellite radio.
Douglas A. McIntyre is a partner at 24/7 Wall St.











Reader Comments (Page 1 of 1)
8-20-2007 @ 11:05AM
Faazi said...
Are you working for NAB?, or are you planning to run for congress? Before I click the link to your article I know that there is probably negative news about SATRAD. You never said anything positive about SATRAD.
8-20-2007 @ 12:08PM
Beverly said...
In the three years I have been invested in both XM
and SIRI, I have NEVER read a positive word from
Douglas McIntyre about Sirius. I no longer pay one
bit of attention to anything he says about SatRad.
Same with some of the other fools. Just ignore
anything they say.... in a year or two, we won't
hear from them again (unless they get smart and
invest in a winner!)
8-20-2007 @ 2:49PM
joe said...
Consumers don't care about how they get the content, they just want the content. The competition might not have the ability to send satellite signals with radio content to receivers, but they do have the ability to play music with out commercials (HD RADIO). This is what the business is all about and this would be competition (and the competetion is free).
8-20-2007 @ 6:45PM
ed drossman said...
I'm surprised there is no uproar about one person owning so many media outlets, ie The Wall Street Journal, Barrons, NY Post, Fox News and Fox Five. Yet the FCC is worried about XM and Sirius merging. I guess Rupert has an in with the FCC or he's paying them off. If Sirius and XM aren't allowed to merge it will prove that regulators don't have the consumer's best interest at heart because the combined XM sirius would cut prices and provide competition for terrestrial radio. The only reason politicians like local radio, who have the real monopoly is because local radio provides them with free PR.
Of course the National Association of Broadcasters (NAB) aren't going to happy with Sirius and XM merger. The combined Sirius and XM would pose a great threat to National Association of Broadcasters' monopoly of the radio. And the National Association of Broadcasters are pushing politicians who they give free airtime on their local radio stations to fight the merger which would lower the price that both XM and Sirius currently charge.
Separately, on another subject, The Sirius XM price cuts show that the merger will benefit consumers. Therefore, if the merger is stopped it will show that regulators don't have consumer's best interests in mind. Also aren't these the same regulators that approved the ATT-SBC merger after the companies were split up years ago for having a monopoly and the AOL Time Warner Merger? Let's not forget that we buy oil and diamonds from the biggest monopolies in the world: OPEC and
DeBeers.
8-22-2007 @ 10:22AM
EMIL J KOVACH JR said...
Is 300 Choices From The Same Programming Director, A REAL Choice?
It's Like Letting Your Mother Pick Out Your Clothes--Exclusively.
Bottom Line 300 Choices, From ONE Person Is No Choice At All.
The Legislators Are Concerned About Control Of News And Information, From ONE Source Only.
And True Choice, Of New Entrants Into the Adult Radio Content Arena, Remember, Content On SATRAD Is Not Subject To SAME Rules As Terrestrial, So If You Have An Adult Content Radio Show, You Have One Chance At A National Market--That Has No Rules, That's Mel's Opinion Of Your Product.
Is That A Real Choice, For Consumers?
EMIL J KOVACH JR
8-22-2007 @ 2:42PM
Beverly said...
Hey, don't forget us RVers out here! Everyone we
have met has SATRAD, mostly Sirius and some have
both. You can go across the country and never have
to change channels if you so desire and, the best
part is NO COMMERCIALS!! Just wish Satellite and
Cable TV offered the same. No government agency
or lobbying group should have the right to choose
what the people want. Let the merger happen soon!!
8-24-2007 @ 7:29AM
EMIL J KOVACH JR said...
"and, the best
part is NO COMMERCIALS!! "
Well--Forget All That.
"We Have Only Scratched The Surface Of The 18 Billion Dollar Radio Ad Market"
Is A Quote From XM's Gary Parsons,
Both Will SLOWLY Be Loaded Up With Commercials--After The Merger, If It Happens.
Up Till Now--COMPETITION Has Kept Them Out.
But It's ALL OVER, If Mel + Gary Get Thier Way.
Free, Un Monopolized , Competitive Markets, Work BEST.
EMIL J KOVACH JR