SIRIUS Satellite Radio Files Preliminary Proxy Statement For XM Merger


No Complaints here
Nov 15, 2004
Atlanta, GA

SIRIUS Satellite Radio (SIRI) filed the first amended S-4 for its XM Satellite Radio (XMSR) merger with the SEC on August 30, 2007.

Shareholder meeting details are still not provided in the proxy materials.

It will be noted at this point that yesterday was day number 88 on the FCC's informal review timeclock, and that the 90 day mark is, according the the FCC, when:

The Commission will endeavor to send to the parties an initial request for information, if necessary, by Day 90. In certain cases, the Commission may be able to determine earlier what additional information it will need from the parties, and the Commission’s failure to issue an initial information request by Day 90 is without prejudice to sending an initial or subsequent request for information after this date.
Naturally, in a case this complex and publicly volatile, the FCC's established guidelines are tenuous, to say the least. In other words, the FCC can be expected to request information from the companies for quite an extended period in this particular review. Furthermore, it remains entirely possible that the regulator will continue to seek information from third parties through an additional pleading cycle and/or public hearings.

At the time of this update, there has been no indication if and when public hearings my be held in association with this review.

With respect to the secondary (SDARS Rule) pleading cycle which ended on August 27, the most interesting -- and perhaps most critical for the FCC in general -- comments came from traditional (terrestrial) radio broadcasters who are now clearly using this merger as a venue for advancing its own market consolidation interests. In short, terrestrial broadcasters are essentially claiming that if the commercial satellite radio industry is allowed to consolidate into a single entity, then local market consolidation rules involving earth-bound radio broadcasters should be lifted as well.

This would seem to pose a very serious dilemma for the FCC in the future, as the aim here is clearly to lay the legal foundation for radio consolidation should this merger be successfully completed. This is a very fascinating and strategic direction for terrestrial radio broadcasters to take at this stage as it essentially establishes a two-pronged argument against the merger which all opponents can point to as the DOJ and FCC reviews move forward. If this argument gains any traction whatsoever (which it most likely will), third-parties not affiliated with the radio industry -- i.e. consumer groups and theoretically politicians -- will be able to point to further potential large-scale radio consolidation in addition to the arguments being presented specifically against the satellite radio merger.

Although not in the least surprising, this tactic is currently perceived as a very effective one by radio broadcasters and one in which could be very damaging for the prospects of this merger being approved by federal regulators.