The storied merger proceedings between Sirius Satellite Radio (NASDAQ: SIRI) and its hoped-for partner, XM Satellite Radio (NASDAQ: XMSR), took another step on Tuesday, albeit one that was widely expected. Shareholders of both companies gave the merger their collective blessing by a healthy majority.
The sizable hurdles of regulatory approval on the part of the Justice Department and the Federal Communications Commission (FCC) remain. Those opposed to the collaboration say the deal would create a monopoly in the satellite radio industry and point to the failed merger attempt between EchoStar Communications (NASDAQ: DISH), parent of the DISH Network, and DirecTV.
People in favor of the merger argue that satellite radio is a luxury, not a necessity (of course, neither is cable television). What's more, as I've pointed out before, satellite radio as an entity still faces plenty of competitive pressures. A consumer at home or in the car is faced with plenty of entertainment options for his listening pleasure, from regular terrestrial radio, to Internet radio broadcasts, to MP3 players, to music offered over cable television airwaves.
The merger was originally announced on February 19, making today the 269th day of this arduous process. In the 8 months and 27 days this has taken, countless babies have been conceived and delivered, Don Imus was fired and rehired, and Rupert Murdoch's News Corp. (NYSE: NWS) made plans to swallow Dow Jones. Sirius Chairman Mel Karmazin reiterated that the merger should close by the end of the year. One can hope.
Beth Gaston Moon is an analyst at Schaeffer's Investment Research.











Reader Comments (Page 1 of 1)
11-14-2007 @ 11:59AM
Richard Varsalona said...
The gov't is taking way too long to approve this thing.No wonder people don't vote,congress has an approval rating below 20 percent,and we can't get anything done.All the selfish infighting is so stupid but typical.Next thing you know,Al Gore will say Sat Radio is breaking down the ozone layer.
11-14-2007 @ 12:15PM
Shaft622 said...
The fact that this merger approval is taking so long is a testiment to the corrupt workings of the FCC and its collusion with the NAB (National Association of Broadcasters). The NAB is fully aware that the future is satelite radio as evidenced by the massive revenue reductions terrestrial radio has experienced in the last 2 years. The NAB is spending millions of dollars trying to influence and block this merger. One has to wonder why this merger approval is taking so long. There have been many mergers approved, in a matter of days, that have had a far greater affect on the American consumer since this process began for Sirius and XM. The plain fact is satelite radio is not a necessity. It should not be regulated by the FCC and frankly these companies viability might hinge on a merger (which the NAB knows). The consumer may even benefit because the merged company could eliminate overlapping programing and overhead allowing them to lower subscription prices.
11-14-2007 @ 12:41PM
Jeff said...
Government shouldn't give it the time of day anyway. Merger is specifically prohibited.
XM / Sirius should think of a better business model or die.
11-14-2007 @ 2:05PM
allcityl said...
Satellite Radio is the future of radio NOW.The difference between satellite radio and FM is, corporate does not predict what the dj's play and there are no sponsors and censorship.
If you are a radio listener you can appreciate the 100 genres of music on satellite radio commercial free. Well worth the costs, plus almost every car maker in the world is installing satellite radios in the vehicles.
11-14-2007 @ 2:08PM
Mike M said...
Satellite Radio is the future of RadioNOW.The difference between satellite radio and FM is, corporate and the sponsors and advertisers do not predict what the stations and dj's play.
If you are a radio listener you can appreciate the 100 different genres of music on satellite radio & it's commercial free. Well worth the costs, plus almost every car maker in the world is installing satellite radios in the vehicles.
11-19-2007 @ 12:49PM
ericsmusclecars said...
as a faithful Sat radio listener.....i think it only makes things better...
http://www.ericsmusclecars.com
11-20-2007 @ 1:26PM
Doug said...
I've been listening to satellite radio for 3 years. I'll never go back to all those commercials on regular old fashion radio, how annoying! There is so much more variety on satellite. More information, different views, more topics. An open minded individual can skip around different channels and be informed from all sides and then make decisions on the multitude of issues. A good venue for educating and informing the masses. This merger needs to happen so satellite can stay competitive with all the other entertainment options available. Not to mention the new technologies just around the corner. If the merger doesn't happen the shareholders will expect to see profits eventually. Under pressure the management will be left with two watered down content providers. Satellite will be overrun by some Ipod WiMax.
11-21-2007 @ 11:41AM
EMIL J KOVACH JR said...
Is This A Business..You Want To Be In?
FROM THE WEB--TODAY
"Summer book Persons Using Radio (PUR) numbers declined to their lowest level since Arbitron began keeping statistics in Fall 1998. Radio usage dropped in every cell except 50-54s. Steepest declines continue to be among teenagers and young adults, as their attention is increasingly diverted to other media. That’s especially true among males, with Men 18-24 and 18-34 cells posting the biggest year-over-year declines. But the crowded media world is also taking a toll on the 25-54 money demo, which fell 15.1-14.9. There’s also a disturbing trend among female demos. In the Summer book not a single female cell saw an increase in listening. All but two (50-54 and 65+) declined. Compare that to male demos. While older women mirror the trend of listening less, the Summer book shows Men 45-64 were listening to the radio more."
EMIL J KOVACH JR
11-29-2007 @ 1:09AM
Dan Schnauth said...
There are those who prefer commercial free Radio and those who are willing to listen to commercials to have free Radio. Both are perfectly OK. The merger between XM and Sirius will only benefit those who prefer commercial free radio. Those subscribers would benefit from the combined formats of XM and Sirius.
12-05-2007 @ 5:27PM
Chinook said...
I agree with Jeff 100%. XM and Sirius were issued permits on the grounds that they could not merge because it would create a monopoly. In 1997, EchoStar and DirecTV tried to merge but they were blocked because of anti-trust concerns. This case is no different. I've done some work with NAB and they have a great website detailing the hidden costs of this proposed monopoly. Check it out -- http://xmsiriusmonopoly.org