Wired Magazine: Sirius And XM Closer To Merging, Say Analysts

mendoman

Pre-XM West Coast Pest
Aug 28, 2002
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#1
http://blog.wired.com/music/2008/02/sirius-and-xm-c.html

Sirius And XM Closer To Merging, Say Analysts

By Eliot Van Buskirk
February 15, 2008 | 12:37:42 PMCategories: Digital Music News



Subscribers to XM and Sirius satellite radio are another step closer to being able to listen to the same programming, with lots of analysts reporting that the Department of Justice will not block the merger between the only two satellite radio companies in the country. XM and Sirius claim that by joining, they'll be able to compete better with internet- and terrestrial radio-based services.
Goldman Sachs analyst Mark Wienkes "said [Sirius's] stock, and that of XM Satellite Radio Holdings Inc., may likely rise as it appears unlikely the Department of Justice will block the hookup of the two companies," according to the Associated Press.

But even with the merger, he said, satellite radio faces an uncertain future: "Longer term, merged or unmerged, our outlook for satellite radio is cautious given our view of unrealistic cash flow expectations,and hence valuation risk."
Meanwhile, Stanford Group analyst Paul Gallant wrote, "We believe the Department of Justice (DOJ) is near a ruling on the XM-Sirius merger, and we reiterate our belief that it is likely to win regulatory approval."
"As for timing, DOJ’s ruling could come any day now. Shortly after DOJ rules, we expect FCC Chairman Martin to recommend to his fellow commissioners the same outcome reached by DOJ."
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PMB917

Black Earl fan since day one
Oct 4, 2004
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#2
Doesn't this same report come out every other week?
 

SwimConnerSwim

O&A Token Midget
Feb 20, 2007
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#3
I've heard this bullshit story nearly word for word about 10 times since Christmas. Yet another stock broker trying to drive up the price of the stock for his clients.
 
7

75.1Glide

Guest
#5
go merger
 

jackjack

Registered User
May 12, 2007
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#7
Yeah. I remember a year ago how a looming merger was coming 'sooner than we think'.
There's always some situation or nugget of information to fuel the speculation.
Last time, in the fall, it drove the XM stock up to $16. Hard core speculators, they use real cash instead of free messages on a board!

This time it's the March 1 expiration date of the current agreement. It has to be extended if it isn't approved by then.
Speculators are betting the DOJ and FCC aren't going to make Sirius and XM go through the process of extending the agreement.
 

Steam

Registered User
May 18, 2003
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#8
So, if the merger happens and my radio becomes an XM/Sirius radio, whose mother am I to fuck?
 

BabyHat3R

and THATS how you executive produce!
Dec 27, 2005
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#12
So, if the merger happens and my radio becomes an XM/Sirius radio, whose mother am I to fuck?
I believe the proper procedure for this would be to fuck your Aunt and pretend that she's your Mother...not %100 sure about that though.
 

LiddyRules

I'm Gonna Be The Bestest Pilot In The Whole Galaxy
Jun 1, 2005
144,474
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#13
Don't forget to flush half of it down the toilet first.
You'll get to flush it all down. The longer it takes to announce whether or not there's a merger, the more harm it'll do to both companies since no one wants to buy technology that may or may not be obsolete in a couple of months. On February 28, it'll be the one year anniversary of Mel Karmazi going in front of Congress.
 

Sinn Fein

Infidel and White Interloper
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Aug 29, 2002
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#16
Remember, people were allegedly rejoicing in the halls @ Sirius a few weeks ago when there was a rumor that O&A got fired from K-Rock... So, I stand by my position.
 
Dec 25, 2005
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#17
Remember, people were allegedly rejoicing in the halls @ Sirius a few weeks ago when there was a rumor that O&A got fired from K-Rock... So, I stand by my position.
If that's true, then why? I can somewhat understand why stern would silently rejoice, but others 'in the halls'? What's the big issue with taking on another talk show geared toward that demo?

uggh. This shit is gonna piss me off.. I know it.
 

Sinn Fein

Infidel and White Interloper
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Aug 29, 2002
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#18
Opie mentioned it on the air, so I don't doubt it is true... In terms of understanding, I am not going to even try.
 

Debbie1125

Registered User
Mar 4, 2007
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#19
This was in Friday's edition of the Daily News.

http://www.philly.com/philly/opinion/15659372.html
Sirius and XM continues to languish in the hands of government regulators, despite hopes that the 10-month antitrust investigation wouldn't drag into 2008.
An otherwise clear-cut approval process has been hijacked by competitors seeking to prevent consumers from receiving better service, more choices and lower prices. As a result, the government could become an accomplice in bankrupting satellite radio and removing a popular product from the market.

Before granting approval, antitrust officials at the Department of Justice must determine whether the merger creates a monopoly, an easy question. Even when combined, Sirius and XM capture less than 4 percent of radio listeners. This doesn't even account for growing competition from new technologies like MP3 players, "high-definition" digital radio, cellular music services and Internet radio. By any objective standard, satellite radio provides only a niche service, and doesn't even approach cornering the vast market in audio entertainment.

What has prevented Justice from reaching this conclusion? The trade association representing traditional radio and TV stations has spent more than $4 million lobbying to block the merger.

According to the National Association of Broadcasters, combining Sirius and XM would create a "government-sanctioned monopoly" in a distinct satellite market. Ironically, in order to handicap its competitors, the NAB must deny that competition exists between traditional and satellite radio.

While contending that its members are unaffected by the merger, the NAB simultaneously spearheads a movement to block it. The NAB has also spent millions on direct lobbying, filed dozens of briefs, even hired former Attorney General John Ashcroft to leverage his influence at Justice.

The NAB emblazoned its headquarters in June with a sign reading "XM + Sirius = Monopoly." Unable to deny credibly that these actions serve its self-interest, the NAB concocted an absurd notion of competition: "Sirius and XM compete directly with us, but we don't compete directly with them."

Broadcasters have made these extraordinary efforts because preventing the merger could put XM and Sirius out of business, ending any threat from satellite radio. Unlike most real monopolies, XM and Sirius have never made a profit. In 2006, their combined losses were nearly $2 billion.

This prompted a Goldman Sachs analyst to declare in November that "the retail satellite radio market is on life support." Even NAB president David Rehr acknowledges that his competitors' "business model is bankrupt."

The longer that broadcasters can delay the review, the closer they come to triggering satellite radio's demise.


IN THIS EPIC battle, Sirius has hired 80 lawyers and submitted more than 6 million pages of documents. XM and Sirius must absorb these expenses because the viability of satellite radio hinges on the merger. Only a combined entity can remain competitive by diversifying offerings and lowering prices.

Even if the merger gains approval from antitrust authorities, it still must endure a second round of scrutiny at the Federal Communications Commission.

An 80-year-old law lets the FCC impose nearly any condition on the merger if it serves the "public interest." This is an open door for interest groups seeking favorable programming restrictions, hardware requirements or price controls. Even though Sirius/XM may walk through this door as a single company, the FCC could give away so many "public interest" concessions that nothing remains for the consumer.

The Sirius/XM merger signals a total failure of the antitrust review system. Instead of protecting consumers by enhancing competition, the endless deliberation creates fewer choices and less competition. True monopolies arise when incumbents manipulate government to suppress new competitors. For the survival of innovative new technologies such as satellite radio, regulators should tune in and butt out. *

Daniel Ballon is a fellow in technology studies at the Pacific Research Institute in San Francisco.
 

Don the Radio Guy

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#20
That's a well written article. It touches on every point that shows why this merger must go through if either company is to survive.
 

Debbie1125

Registered User
Mar 4, 2007
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#21
An 80-year-old law lets the FCC impose nearly any condition on the merger if it serves the "public interest." This is an open door for interest groups seeking favorable programming restrictions, hardware requirements or price controls. Even though Sirius/XM may walk through this door as a single company, the FCC could give away so many "public interest" concessions that nothing remains for the consumer.

This paragraph disturbs me, because it sounds like the FCC would try to impose terrestrial-like restrictions on satellite radio content.

Public interest groups = Al Sharpton, NOW, Gays, Focus on the Family, Christian conservatives, etc. It would get to the point where people like O&A and Stern would be censored to the point of not being able to do a show. Now I am not a Stern fan, but I am totally against censorship.
 

weeniewawa

it's a man, baby!!!
May 21, 2005
12,076
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#22
If that's true, then why? I can somewhat understand why stern would silently rejoice, but others 'in the halls'? What's the big issue with taking on another talk show geared toward that demo?

uggh. This shit is gonna piss me off.. I know it.
yea why would they be happy about losing a popular show that brings in revenue that will help both companies out in the long run? I hate ofrah but if she brings in any positive money with her deal, than so be it. I just don't have to listen. Even hoo hoo is OK if he is in the positive, 500 mil I am not sure. I think sirrius is in more of a need for help financially with all the huge contracts they have.
but I'm no Ivan Investor
 

jackjack

Registered User
May 12, 2007
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#23
An 80-year-old law lets the FCC impose nearly any condition on the merger if it serves the "public interest." This is an open door for interest groups seeking favorable programming restrictions, hardware requirements or price controls. Even though Sirius/XM may walk through this door as a single company, the FCC could give away so many "public interest" concessions that nothing remains for the consumer.

This paragraph disturbs me, because it sounds like the FCC would try to impose terrestrial-like restrictions on satellite radio content.

Public interest groups = Al Sharpton, NOW, Gays, Focus on the Family, Christian conservatives, etc. It would get to the point where people like O&A and Stern would be censored to the point of not being able to do a show. Now I am not a Stern fan, but I am totally against censorship.

The law allows the FCC to impose conditions in the interest of serving the public, but I never saw anything that said they were considering doing anything like that.

I've heard about demands made by interest groups, but that is to be expected. I never heard of any concessions by the FCC.
 

Mindslayer

Best in the Biz
May 4, 2006
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#24
Hasnt it been almost exactly a year to the say since the supposed merger was first announced ? I remember being off from work for the winter break this time last year and listening to the conference call during the show.
 

Party Rooster

Unleash The Beast
Apr 27, 2005
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#25
Unfortunately XM going out of business doesn't either. I'll take my chances with Mel Karmazi.
It has been speculated that if one or both companies go belly up, they'll most likely be acquired by one of the major auto companies. There's too much infrastructure and hardware in automobiles in place to just let it die.