XM and Sirius to merge, pending government approvals

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XM/SiriusThis will be a very interesting story to watch unfold. For many months, the rumors of a merger between the two satellite radio companies have been getting stronger and stronger. Now that rumor has become reality, there will be a bunch of details to be worked out. Aside from getting the government to approve the deal, you can bet the National Association of Broadcasters will be fighting this move all the way. The lobbyists will certainly be busy these next few months.

Sports fans should celebrate this move - XM subscribers should gain access to the NFL, NBA, and NASCAR. Sirius subscribers get MLB, and the NHL. University of Michigan fans that have XM and not Sirius should get access to the Wolverines on a combined system.

It's a great deal for the signature personalities on both systems too - especially Howard Stern, Oprah, and Opie and Anthony. They all essentially double their audience potentials.

One thing to keep an eye on- will this announcement slow new subscriber numbers as potential customers wait and see what's going to happen with new receivers, subscription prices, and the "final" content offerings?

Press release: SIRIUS and XM to Combine in $13 Billion Merger of Equals



XM, Sirius merger plan has widening ripples

By: Art Vuolo; published in The Oakland Press Feb 20, 2007

What effect will the $13 billion merger of XM Satellite Radio and Sirius Satellite Radio have on the local economy and the Big Three automakers? General Motors Corp. has a lucrative deal with XM to put radios in most GM vehicles. Sirius is partnered with both DaimlerChrysler AG and Ford Motor Co.

Troy-based Delphi Corp. will be affected if the merger goes through, because most XM radios in the marketplace today are made by Delphi.

The stock, for Sirius with 6 million customers and XM with 8 million subscribers, will no doubt be affected, but the deal was announced on Presidents Day, and there was no trading on Wall Street. XM was trading in the $30 range, but for most of the past year, prices had dipped to the $12 level. Sirius peaked at near $10 about 15 months ago and remains in the $3 range.

A number of employees at both companies have ties to Michigan. Two major names in New York City radio who are from Michigan are Pat St. John and Jim Kerr at Sirius. At XM, much of programming was originally set up by Lee Abrams, WRIF’s second programmer in 1973. Popular DJs Johnny Williams, Dan Dixon, Terry Young and Phlash Phelps worked at Michigan stations.

Insiders asked why the competing companies didn’t push for radios capable of picking up both sets of signals. The merger could lead to some combination of hardware.

All this depends on Federal Communications Commission approval. It would have to waive its earlier ruling against such a deal, and the National Association of Broadcasters will fight the merger.

XM is based in Washington, D.C., and Sirius in New York City. The head of the combined company would be Sirius CEO and former terrestrial radio tycoon Mel Karmazin, while XM Chairman Gary Parson would retain his position. XM founder and CEO Hugh Panero would leave if and when the merger were consummated.

The buyout of ABC Radio, which owns WJR-AM (760) locally, involving The Walt Disney Co. and Citadel Broadcasting, also a multi-billion dollar transaction, was announced a year ago with a closing promised by the end of last year.

Now, it’s been moved to June or possibly as late as next fall. So don’t expect this “marriage in the skies” to happen overnight either.



Perhaps somebody could explain why the purported benefits to listeners of this deal need a merger - unless, of course, programming is to be cut back.
Technical matters in terms of satellites and receivers capable of receiving both signals could be attained through a joint subsidiary to provide the transmission services as could billing and other services, leaving competition in the area that matters most to the listeners, the programming.






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This page contains a single entry by Mike Austerman published on February 19, 2007 3:15 PM.

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