Analysts Say, "The Merger Stinks, And We Don't Like It!"


Crowell & Moring, a law firm specializing in antitrust law, has released an analysis about the proposed satellite radio merger of XM and Sirius after being retained by the National Association of Broadcasters (NAB) to provide such analysis. The report, which was recently sent to lawmakers and filed with the FCC, characterizes the proposed merger of XM and Sirius as "clearly anticompetitive."

The report examines arguments made in favor of the merger by the two satcasters, such as the idea of freezing the subscription price. However, the report says that this is not enough to make the merger ethical. "The parties suggest that regulators should not be worried about their merger to monopoly because they will submit to price regulation that temporarily locks in the current rates to ensure that satellite customers do not pay more after the merger than they did before," reads the report. "This argument completely disregards the very reason the antitrust laws apply to mergers – to ensure that markets are structured in a way to encourage competition. The very notion that a competitive market structure, which so far has produced a given degree of price competition between the parties, should be replaced by a monopoly provider subject to price regulation is antithetical to the purpose and foundation of the antitrust laws."

The satcasters also have argued that a merger will allow them to achieve efficiencies and cost savings from the transaction. However, the analysis says "there exists no set of efficiencies that could offset the very significant competitive harm that will result from this merger." Also, the satcasters have claimed that terrestrial radio is in competition with satellite, but Crowell & Moring say this is not true. "This ignores the fundamental characteristics of the two services. Satellite is marketed as a 'premium' service, with better audio quality, greater programming variety, and little (or no) commercial interruption," reads the report. "Instead, satellite and terrestrial radio are complementary services."

Finally, the analysis concludes, "The proposed merger between XM and Sirius will eliminate the only effective competition among the two providers of satellite [radio] and is clearly anticompetitive. The growth of satellite over the past five years, and the pricing of those services, illustrates that the parties’ offerings are not price constrained by other forms of audio content delivery. Instead, the only restraint on the ability of either firm to charge supra-competitive prices, offer less-than-competitive quality of service or output, or purchase content for less-than-competitive prices, is the very existence of the other firm as its only competitor. The proposed merger would replace this duopoly market structure, set up specifically by the FCC to ensure at least some level of price and service competition, with a monopolist in the downstream subscription market (and a monopsonist in the upstream content market) that is unrestrained in its ability to harm competition. There simply is no 'fix' that will restore the competitive structure of this marketplace, and thus [Department of Justice] should challenge the transaction to preserve existing and future competition."

Meanwhile, the merger is still a long way off if it happens at all. It has been 70 days since the two satcasters filed their intentions with federal regulators, and the merger hasn't even passed the preliminary review process yet. The FCC has yet to start its 180-day merger-review clock. "This constitutes the longest application-to-clock delay in FCC history," said David Trout of M&A Researcher, according to "There is simply no way to view the delay in a positive light."


Silence, you mortal Fuck!
Crowell & Moring... after being retained by the National Association of Broadcasters (NAB)
Gee, commercial radio thinks the merger is bad? That's huge news. In other big developments, Coke thinks Pepsi stinks, too.:rolleyes:


Guess who's back? Hoffman's back
Surprise surprise. Every expert since this was announced has said the likelyhood of a merger being approved is anywhere between 10 and 30%. This thing is as dead as the fucking dinosaurs.


Frank Reynolds is my hero
I don't know. I don't think that I can agree with anything the NAB is against.

City View

Insert witty line here...
So if/when the merger doesn't go through, which company goes under first?


Guess who's back? Hoffman's back
So if/when the merger doesn't go through, which company goes under first?
I doubt each one goes under. Dish and DirecTV were in similar situations when their proposed merger was canned, they're both still around.


Unofficial Supplier of Cats to Gauleiter Cumia
Clearly the Jews are to blame. Ok terrific.



I can keep rhythm with no metronome...
I like how in the beginning both companies stated that they wouldn't have put this out there if they didn't think it would go through. Yet each and every article I've seen proposes this merger/buyout. Also haven't seen many politicians or regulators for it. So who the fuck did the companies talk to that thought this was a good idea? I'm sure they've spent millions they don't have to get approval and it's all going to be wasted b/c Mel and Gary got wild hairs up their asses.


The executioner of Mouseschwitz!
At this point who is FOR the merger besides XM and Sirius?
Nobody in their right fucking mind. We have anti-trust laws for a reason. Their entire reason for merging (Sirius acquiring XM) is that they don't know how to compete effectively. Meanwhile, they're pissing away rediculous money for the likes of Oprah and Hoo Hoo. How responsible is Sirius for giving that dick nose half a billion dollars + a shitload of options? Now their stock is below $3 a share and they need this merger just to save their ass. The whole reason for the buyout of XM is to eliminate Sirius' only competitor from the marketplace so that their costs of new subs goes down since they won't have to give away so much in order to gain new customers and to get all the XM revenue while eliminating most of the overhead since Hugh and his friends will get a nice payday and go away. And if you want to know who gets fucked in the deal, look in the mirror if you are or plan to be a subscriber.

Demon Mayor

Complete Dork.
The funniest thing about this deal is that there is no possible way they could allow satelite radio to merge since they didn't let satelite TV merge, but XM and Sirius dilluded themselves into thinking they could because apparently Mel Karmazi is some sort of magic leprachan.

And if you think corporations are hyper-sensitive to complaints, Members of Congress are worse. If they get 20 negative letters about an issue like this (and none in favor), it's considered overwhelming public opposition. I'd recommend actually writing a physical letter and not just emailing, too. Those are taken way more seriously, especially since most people email now.