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Reds Fanatic
02-19-2007, 03:51 PM
Not sure what this will eventually mean to all of us subscribers but it looks like the long rumored XM/Sirius merger may be happening.

http://abcnews.go.com/Business/story?id=2887179


Feb. 19, 2007 ABC News has confirmed reports that two satellite radio providers XM and Sirius will announce a long-anticipated merger today.

The two companies worked over the weekend to finalize a plan that is expected to be structured as a "merger of equals," although ABC News has learned the plan calls for Sirius CEO Mel Karamzen to run the new company.

The merger would require regulatory approval as well as anti-trust scrutiny.

Kevin Martin, chairman of the Federal Communications Commission, reportedly said last month that a merger could not be approved under current FCC regulations.

Yachtzee
02-19-2007, 04:00 PM
If it means I get MLB and NFL over Satellite Radio, I say great!

Joseph
02-19-2007, 04:02 PM
I have XM and hope this doesn't mean upgrading my hardware since I JUST did it two weeks ago.

Other than that, all the better in my eyes.

Yachtzee
02-19-2007, 04:13 PM
I have XM and hope this doesn't mean upgrading my hardware since I JUST did it two weeks ago.

Other than that, all the better in my eyes.

I have a feeling that with all the factory installed satellite radios, they'd probably create a merged channel line-up and continue to broadcast to existing equipment. Imagine how much it would stink if you owned a car with factory XM or Sirius and you had to have the radio ripped out and replaced to get the new content. Not exactly a good way to hold on to subscribers.

Reds Fanatic
02-19-2007, 04:14 PM
They have now officially announced the merger. If appoved could be completed by the end of 2007.


WASHINGTON and NEW YORK, Feb. 19 /PRNewswire-FirstCall/ -- XM Satellite Radio (NASDAQ: XMSR) and SIRIUS Satellite Radio (NASDAQ: SIRI) today announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.

Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.

Mel Karmazin, currently Chief Executive Officer of SIRIUS, will become Chief Executive Officer of the combined company and Gary Parsons, currently Chairman of XM, will become Chairman of the combined company. The new company's board of directors will consist of 12 directors, including Messrs. Karmazin and Parsons, four independent members designated by each company, as well as one representative from each of General Motors and American Honda. Hugh Panero, the Chief Executive Officer of XM, will continue in his current role until the anticipated close of the merger.

The combined company will benefit from a highly experienced management team from both companies with extensive industry knowledge in radio, media, consumer electronics, OEM engineering and technology. Further management appointments will be announced prior to closing. The companies will continue to operate independently until the transaction is completed and will work together to determine the combined company's corporate name and headquarters location prior to closing.

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts' consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform for future innovation within the audio entertainment industry and will provide significant benefits to all constituencies, including:

* Greater Programming and Content Choices -- The combined company is
committed to consumer choice, including offering consumers the ability
to pick and choose the channels and content they want on a more a la
carte basis. The combined company will also provide consumers with a
broader selection of content, including a wide range of commercial-free
music channels, exclusive and non-exclusive sports coverage, news,
talk, and entertainment programming. Together, XM and SIRIUS will be
able to improve on products such as real-time traffic and rear-seat
video and introduce new ones such as advanced data services including
enhanced traffic, weather and infotainment offerings.

* Accelerated Technological Innovation -- The merger will enable the
combined company to develop and introduce a wider range of lower cost,
easy-to-use, and multi-functional devices through efficiencies in chip
set and radio design and procurement. Such innovation is essential to
remaining competitive in the consumer electronics-driven world of audio
entertainment.

* Benefits to OEM and Retail Partners -- The combined company will offer
automakers and retailers the opportunity to provide a broader content
offering to their customers. Consumer electronics retailers, including
Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit
from enhanced product offerings that should allow satellite radio to
compete more effectively.

* Enhanced Financial Performance -- This transaction will enhance the
long-term financial success of satellite radio by allowing the combined
company to better manage its costs through sales and marketing and
subscriber acquisition efficiencies, satellite fleet synergies, combined
R&D and other benefits from economies of scale. Wall Street equity
analysts have published estimates of the present value of cost synergies
ranging from $3 billion to $7 billion.

* More Competitive Audio Entertainment Provider -- The combination of an
enhanced programming lineup with improved technology, distribution and
financials will better position satellite radio to compete for
consumers' attention and entertainment dollars against a host of
products and services in the highly competitive and rapidly evolving
audio entertainment marketplace. In addition to existing competition
from free "over-the-air" AM and FM radio as well as iPods and mobile
phone streaming, satellite radio will face new challenges from the rapid
growth of HD Radio, Internet radio and next generation wireless
technologies.
"We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Gary Parsons, Chairman of XM Satellite Radio and Hugh Panero, CEO of XM Satellite Radio, in a joint statement. "The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago."

"This combination is the next logical step in the evolution of audio entertainment," said Mel Karmazin, CEO of SIRIUS Satellite Radio. "Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies. The combined company will be positioned to capitalize on SIRIUS and XM's complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders."

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. Pending regulatory approval, the companies expect the transaction to be completed by the end of 2007.

SIRIUS's financial advisor on the transaction is Morgan Stanley and Simpson Thacher & Bartlett LLP and Wiley Rein LLP are acting as legal counsel. XM's financial advisor on the transaction is J.P. Morgan Securities Inc. and Skadden Arps, Slate, Meagher & Flom LLP; Jones Day; and Latham & Watkins LLP are acting as legal counsel.

Conference Call and Webcast Information

The companies will hold a joint conference call and webcast on Tuesday, February 20, 2007 at 8:30 AM ET to discuss this announcement. The conference call can be monitored by dialing 800-573-4840 within the U.S. and 617-224-4326 for all other locations, passcode 29490052. The webcast can be accessed at http://www.sirius.com/ and http://www.xmradio.com/ as well as on their satellite radio services by tuning to SIRIUS channel 122 and XM channel 200. The webcast will be archived at http://www.sirius.com/ and http://www.xmradio.com/

WMR
02-19-2007, 04:19 PM
Will the new company be called XM or Sirius?

Red Leader
02-19-2007, 04:32 PM
Will the new company be called XM or Sirius?

IM Sirius.

Joseph
02-19-2007, 04:37 PM
IM Sirius.

Boooooo

:)

I'd wager they are called Sirius because that was the stocks the XM holder would be getting if I read correctly in one of those articles.

WMR
02-19-2007, 04:46 PM
Bababooey

Red Leader
02-19-2007, 04:55 PM
Get Yahoo involved and we could be looking at the next

Yahoo Sirius.

*runs off stage*

jmcclain19
02-19-2007, 05:32 PM
I guess this was inevitable at some point.

I just wonder in the very near future if the new company will decide on one set of technology (XMs, Sirius, or a new third type) and tell everyone going forward they must use this type.

I just went thru the same thing with Cingular & AT&T. I had just spent some cash upgrading to a PDA phone when a few weeks later I heard about the merger. Cingular said all the right things at the begining, that all the old phones would work on the new system. But when it came contract re-up time, every AT&T customer like myself was forced to make a decision - get a new free entry level phone or pay big bucks once again for a new pda phone - as the AT&T phones would not be allowed to be re-upped.

Quite the 180 - but you're stuck at that point.

KronoRed
02-19-2007, 06:05 PM
I say good on this deal, having college football split across 2 networks was a deal breaker.

Caveat Emperor
02-19-2007, 06:06 PM
Bababooey

They don't measure time in increments small enough to describe how fast I'll smash my MyFi on the ground if Karmazin and Stern boot Opie & Anthony or Ron & Fez off the new combined service.

KronoRed
02-19-2007, 06:06 PM
I just went thru the same thing with Cingular & AT&T.

Get ready for an extra kick when your new Cingular phone starts saying AT&T ;)

WMR
02-19-2007, 06:41 PM
They don't measure time in increments small enough to describe how fast I'll smash my MyFi on the ground if Karmazin and Stern boot Opie & Anthony or Ron & Fez off the new combined service.

Hahaha... It will be interesting to see how it shakes out... Stern has always been pretty unabashed in his descriptions of O&A as hackey and lame poorly-executed impressions of the style of radio he pioneered. :evil:

Caveat Emperor
02-19-2007, 07:11 PM
Hahaha... It will be interesting to see how it shakes out... Stern has always been pretty unabashed in his descriptions of O&A as hackey and lame poorly-executed impressions of the style of radio he pioneered. :evil:

And O&A have always been quick to point out that Stern hasn't been relevant since the mid-'90s, his act is old and stale, and that he's really just mailing it in at this point. :evil:

I agree, it'll be interesting -- but I'll be, shall we say, "perturbed" if Stern pulls another power trip and throws his weight to get O&A bumped off the air or off morning drive, especially since they don't have a FreeFM affiliate in Cincinnati to listen to them on.

gilpdawg
02-19-2007, 07:16 PM
They don't measure time in increments small enough to describe how fast I'll smash my MyFi on the ground if Karmazin and Stern boot Opie & Anthony or Ron & Fez off the new combined service.
And that my friend, is truth. I'm officially worried about the bbboys.

WMR
02-19-2007, 07:56 PM
And O&A have always been quick to point out that Stern hasn't been relevant since the mid-'90s, his act is old and stale, and that he's really just mailing it in at this point. :evil:

I agree, it'll be interesting -- but I'll be, shall we say, "perturbed" if Stern pulls another power trip and throws his weight to get O&A bumped off the air or off morning drive, especially since they don't have a FreeFM affiliate in Cincinnati to listen to them on.

There's just so much bad blood between the two... I'll be really amazed if O&A survive on the new Sirius.

WMR
02-19-2007, 07:59 PM
UPDATE 2-Sirius to buy XM in $4.6 bln stock deal

NEW YORK, Feb 19 (Reuters) - Sirius Satellite Radio (SIRI.O: Quote, Profile , Research) agreed to buy larger U.S. rival XM Satellite Radio (XMSR.O: Quote, Profile , Research) for $4.6 billion in stock on Monday in a deal that gives all subscribers access to entertainers such as Oprah Winfrey and shock-jock Howard Stern.

The transaction, which faces regulatory scrutiny and objections from terrestrial radio companies, gives XM shareholders 4.6 Sirius shares for each XM share held.

The deal has Sirius paying about $4.6 billion in stock for XM, or a 21.7 percent premium to XM's closing share price of $13.98 on Friday, based on shares outstanding in the latest regulatory filings.


Veteran media executive Mel Karmazin, currently Sirius CEO, will lead the new company as CEO, while Gary Parsons, now chairman of XM, will hold the same position in the new company. It said Hugh Panero, XM CEO, will continue in his current role until the merger closes.

The merger would create a company with about $1.5 billion in 2006 revenue and an enterprise value of $13 billion, including $1.6 billion in net debt.

"This combination is the next logical step in the evolution of audio entertainment," said Karmazin in a statement. He said it will create "unprecedented choice for consumers."

The deal will face tough regulatory scrutiny. The satellite radio licenses prevent one entity from owning them, however Federal Communications Commission Chairman Kevin Martin said last month that its rules are open to change
"I think it's a close call, but more likely than not I think the Justice Department and the FCC approve it," said Blair Levin, an analyst at Stifel Nicolaus & Co. and a former FCC chief of staff during the Clinton administration.

The National Association of Broadcasters, which represents local broadcast radio stations, immediately criticized the tie-up because it would concentrate the licenses into one company and accused them of seeking a government bailout.

"When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive nationwide systems," said NAB spokesman Dennis Wharton.

"Now, with their stock prices at rock bottom and their business model in disarray because of profligate spending practices, they seek a government bailout to avoid competing in the marketplace," he said.

Puffy
02-19-2007, 08:03 PM
And O&A have always been quick to point out that Stern hasn't been relevant since the mid-'90s, his act is old and stale, and that he's really just mailing it in at this point. :evil:

I agree, it'll be interesting -- but I'll be, shall we say, "perturbed" if Stern pulls another power trip and throws his weight to get O&A bumped off the air or off morning drive, especially since they don't have a FreeFM affiliate in Cincinnati to listen to them on.

If you think Howard would pull a power trip then you don't know him. He's the one who hired Bubba the Love Sponge even though Bubba trashed him non-stop for years. Howard Stern is a radio guy first and foremost and he has always said that with as many times as he has been fired he would never be a party to causing someone to lose their gig based on a dislike.

Obie and Anthony are not half the men Howard is - like him or hate him he's stand up.

WMR
02-19-2007, 08:16 PM
True Puffy, but Howard has said himself that he only spoke on Bubba a couple times...

the acidic history between him and O & A is much lengthier and nastier...

but, like you said, he's a radio guy and savvy businessman first and foremost...

Does it make better sense to appease the millions of fans who followed him to satellite or keep on O & A who could only get between 30,000-40,0000 XM subscribers to pony up the extra money to hear them each month?

Caveat Emperor
02-19-2007, 08:18 PM
If you think Howard would pull a power trip then you don't know him. He's the one who hired Bubba the Love Sponge even though Bubba trashed him non-stop for years. Howard Stern is a radio guy first and foremost and he has always said that with as many times as he has been fired he would never be a party to causing someone to lose their gig based on a dislike.

Obie and Anthony are not half the men Howard is - like him or hate him he's stand up.

He's already on record as admitting that he put a gag-order on O&A back when they were all on FM in New York -- he had Karmazin tell them not to talk about him or goof on him in any way. Stand up right there. Admittedly, it's a different environment now -- Stern is paid no matter what happens, so I can see him just not caring at this point.

I used to be a big Stern fan back in the day, but I just got tired of it when I was in college. To each his own, though.



Does it make better sense to appease the millions of fans who followed him to satellite or keep on O & A who could only get between 30,000-40,0000 XM subscribers to pony up the extra money to hear them each month?

According to XM's internals, O&A's channel is the most popular talk station on XM. I don't know what the numbers are, but I think they're fairly substantial. Enough subscribers that I think it would give Karmazin pause for thought before canning them.

Of course, O&A might just walk rather than dealing with Stern again. Who knows.

Red in Chicago
02-19-2007, 08:43 PM
i've had sirius radio ever since howard announced he was moving over there...my only disappointment has been the fact that they didn't have baseball...i sure hope this merger goes through...i was actually talking to a friend today telling him that i was probably going to buy an xm radio this year, just for the baseball...if the merger goes through, i guess i can wait another year...

the only bad news on this, is that i sold my shares of sirius too soon...:bang:

redsfan1966
02-19-2007, 09:09 PM
this news scares me...of course, if everything stays the same and i can access all programming on my existing unit- cool--i would love having mlb, nascar and the nfl...but i bet anything this will not be the case...i sunk a good deal of cash into my xm equipment and if it becomes obsolete--i will be enraged--also, i will enjoy hearing stern again--but i will also be disappointed if o and a are eliminated from the line-up

jmcclain19
02-19-2007, 09:31 PM
Personally I don't care for Stern or Opie And Anthony.

I have XM for Baseball, and for the commerical free music. And if they change either drastically, well, I'll just stop sending them a check every month. And that would be hard, as I'm a huge fan of XM.

And thanks to Clear Channel - we have XM with commericals. I wonder how that will shake out.

cincinnati chili
02-19-2007, 10:23 PM
For those who follow such things?...

How in the world are they going to justify this to regulators? I think the answer is that they convince them that the "relevant market" is all radio, and thus the two companies are only a small portion of that.

Of course, most sentient beings know that's a load of crap. There's only two places you can buy coast-to-coast radio - XM and Sirius. If this goes through, there will only be one.

Hence, if this goes through, expect the price of service to double within a couple years. People will pay it. Even if 1/4 of their listeners bolt, they'll make out like bandits.

Monopolies bad. Competition good.

Yachtzee
02-19-2007, 10:30 PM
Personally I don't care for Stern or Opie And Anthony.

I have XM for Baseball, and for the commerical free music. And if they change either drastically, well, I'll just stop sending them a check every month. And that would be hard, as I'm a huge fan of XM.

And thanks to Clear Channel - we have XM with commericals. I wonder how that will shake out.

I wonder what ownership stake Clear Channel will have in the merged company. If the merger means getting rid of the Clear Channel commercial stations, that could be a good thing, except that we lose WLW for the Reds and Bengals talk. Then again, with the quality of hosts WLW hires, that may not be much of a loss.

I will be happy if you can get the MLB baseball, the MLB Home Plate channel, NFL footbal and the related NFL channel from Sirius, and some decent commercial free alternative music stations. When it comes to music stations, Cleveland has very little variety in their station formats. I really hate being stuck in the Classic Rock capital of the world. As far as the other stuff, I listen to Opie and Anthony at times, as they seem to be more my speed than Stern, but the whole Stern v. O&A thing just isn't as important to me as the baseball and the football and the alternative music.

Oh, now that I look at it, Sirius has the English Premiership and Champions League. I'd like that too, thank you.

Yachtzee
02-19-2007, 10:38 PM
For those who follow such things?...

How in the world are they going to justify this to regulators? I think the answer is that they convince them that the "relevant market" is all radio, and thus the two companies are only a small portion of that.

Of course, most sentient beings know that's a load of crap. There's only two places you can buy coast-to-coast radio - XM and Sirius. If this goes through, there will only be one.

Hence, if this goes through, expect the price of service to double within a couple years. People will pay it. Even if 1/4 of their listeners bolt, they'll make out like bandits.

Monopolies bad. Competition good.

I don't know. I think they still need to keep the prices low to encourage new subscribers. It's not like cable or satellite TV, where so many people have grown up with cable that going back to broadcast TV is out of the question. Broadcast radio is still competitive enough with satellite radio to the degree that satellite will need to keep prices low and offer a better product to encourage people to pay for it. Satellite radio still needs new subscribers to cover the costs of production. If they raise the price of a subscription too quickly, they run the risk of stagnation.

Jpup
02-19-2007, 11:03 PM
If you think Howard would pull a power trip then you don't know him. He's the one who hired Bubba the Love Sponge even though Bubba trashed him non-stop for years. Howard Stern is a radio guy first and foremost and he has always said that with as many times as he has been fired he would never be a party to causing someone to lose their gig based on a dislike.

Obie and Anthony are not half the men Howard is - like him or hate him he's stand up.

He already did it to O and A.

deltachi8
02-20-2007, 12:16 AM
As long as I keep MLB and NHL radio, I don't care what they do.

Caveat Emperor
02-20-2007, 01:30 AM
As long as I keep MLB and NHL radio, I don't care what they do.

Part of the story thus far, however, has been that the merger will allow for greater "consumer choice" in channels -- aka "a la carte" pricing scales for channel packages, much like current cable systems.

I know I'll be more than a little upset if I have to pay an extra few bucks per month to get things I already got in my subscription fee to XM. I could easily see the NFL and MLB content go to a system where you have to pay extra for each.

Another problem they're going to run into is bandwidth. I'm not much of a techie, but I know that both companies are limited in the amount of information they're allowed to beam down from the satellite. Both companies use compression to maximize the amount of data that can be placed on the signal -- its why satellite radio can't acheive true CD-quality sound on the music and why a lot of the talk radio sounds barely above internet streaming audio quality. XM's compression software is, allegedly, better than Sirius's, which is why the sound quality on the music channels is usually said to be a little better.

I'm not certain whether the FCC will allow the two companies to consolidate their bandwidth into one singal -- if they don't, it'll mean that not all the content can make the switch. A lot of redundancies can be elminated on the music end (they won't need two 80s channels, for example), but I imagine things will get tight when you're running every basketball game being played, every hockey game being played, plus college basketball games and an NFL game or two all at the same time. Talk doesn't take up as much bandwidth as music, but that'll still stretch things thin and sacrafice sound quality somewhere.

KronoRed
02-20-2007, 03:08 AM
If the FCC allows them to merge I'm betting it's going to be on the condition they get one of the companies frequencies back to resell to someone else.

Puffy
02-20-2007, 11:13 AM
He already did it to O and A.

No, he didn't. Thats a rumor and its flat out wrong. He's adressed this on his show. He said that Mel K came to him and he flatly stated he didn't care what they said and that if he had a problem he'd address it on the air.

Not everything you read is true - and not everything O & A try to feed to people is true. Howard Stern does not need to place a gag order on anyone - he has a bigger base to yell to then anyone and he's at his best when he has a "cause"

O & A will stay if its up to Howard. He won't like them but he will not be the cause of anyone being fired.

Trust me, its a rumor and its not true.

Joseph
02-20-2007, 11:31 AM
I currently have two XM's, pay about 20 bucks a month between the two and I do it for baseball. I don't care about the NFL. I don't care about college basketball, or football. I don't care about 120 channels of music. Sure I listen to the music channels from time to time, but if they try to make the music the base, and charge more for baseball, I'm out.

Sea Ray
02-20-2007, 12:12 PM
You can sure see why these companies ran into financial problems. Paying a guy like Howard Stern $300mill in his first year in salary and bonus does not show any fiscal sanity.

Red in Chicago
02-20-2007, 12:18 PM
You can sure see why these companies ran into financial problems. Paying a guy like Howard Stern $300mill in his first year in salary and bonus does not show any fiscal sanity.

he's the reason that sirius is the one doing the acquiring and not being the one that's acquired...

5DOLLAR-BLEACHERBUM
02-20-2007, 12:48 PM
i've had sirius radio ever since howard announced he was moving over there...my only disappointment has been the fact that they didn't have baseball...i sure hope this merger goes through...i was actually talking to a friend today telling him that i was probably going to buy an xm radio this year, just for the baseball...if the merger goes through, i guess i can wait another year...

the only bad news on this, is that i sold my shares of sirius too soon...:bang:

I sold mine months ago, looked today and it SIRI is still at less than 4$ a share. Im not convinced that this is going to help SIRI shareholders as much as it will bail out xm shareholders. I may still buy some if it levels out todaym right noe it is up about .27.

Red in Chicago
02-20-2007, 01:11 PM
I sold mine months ago, looked today and it SIRI is still at less than 4$ a share. Im not convinced that this is going to help SIRI shareholders as much as it will bail out xm shareholders. I may still buy some if it levels out todaym right noe it is up about .27.

i've been watching the stock all morning and honestly, i thought it would be up more than it is today...for now, i'm glad i didn't put in a buy order this morning...it is worth keeping an eye on though

Redhook
02-20-2007, 03:02 PM
i've been watching the stock all morning and honestly, i thought it would be up more than it is today...for now, i'm glad i didn't put in a buy order this morning...it is worth keeping an eye on though

I own shares of XM, not much thankfully, and it has been a roller coaster ride over the past year. I can't stand it. Like 5Dollar mentioned above I'm hoping to get bailed out from this deal. I would take a 10-20% loss at this point and be happy.

I would be very very cautious buying sirius' stock. The risk, at this point, seems to outweigh the reward.

Also, I used to have XM in my car for a couple of years. IMO, it's fantastic for traveling and listening to the Reds if you don't live in the 'Nati. Since I live in Cincinnati and don't travel much I have virtually no need or desire to carry satellite radio anymore.

registerthis
02-20-2007, 04:12 PM
For those who follow such things?...

How in the world are they going to justify this to regulators?

...

Monopolies bad. Competition good.

A report I heard on NPR this morning seemed to say that this deal is highly unlikely to go forward, as it likely won't stand up to anti-trust scrutiny.

Yachtzee
02-20-2007, 07:25 PM
Part of the story thus far, however, has been that the merger will allow for greater "consumer choice" in channels -- aka "a la carte" pricing scales for channel packages, much like current cable systems.

I know I'll be more than a little upset if I have to pay an extra few bucks per month to get things I already got in my subscription fee to XM. I could easily see the NFL and MLB content go to a system where you have to pay extra for each.



After more thought today, I think this is my biggest concern as a consumer. If they give me Oprah and Stern (and I want neither) for free, but charge me extra to get MLB and NFL, I'll be extremely unhappy.

Caveat Emperor
02-20-2007, 10:43 PM
A report I heard on NPR this morning seemed to say that this deal is highly unlikely to go forward, as it likely won't stand up to anti-trust scrutiny.

The Dish Network / DirecTV merger got shot down because of anti-trust issues. Admittedly, anti-trust wasn't my forte in law school (that's cincinnati chili's expertise) but I have to imagine that the principles in this deal are aware of this prior failure and have prepared for it.

For a deal to be this advanced, there has to have been some preparation for any arguments as to anti-trust. Especially in light of the DirecTV fiasco, if XM and Sirius aren't completely convinced they can pass DOJ muster, then a whole group of somebodies should lose their jobs for not planning ahead.

WMR
02-20-2007, 10:48 PM
I know a bit about this area of IP, CE, and the big difference here is that there is still the huge conglomerate of terrestrial radio which represents valid competition for any satellite radio companies.

You want to see a company that should be scrutinized for being a monopoly? Have a good look at Clear Channel. Pure evil.

The cable comparison vs. terrestrial radio is too different to be truly parallel IMO.

cincinnati chili
02-20-2007, 11:39 PM
One of the first steps in antitrust analysis is to determine the relevant market.

The lawyers for the merging companies will argue that the relevant market is "all radio."

The lawyers for the Justice Department (who are supposed to represent consumers) will argue that the relevant market is "satellite radio."

If the latter argument prevails, then the merger is toast.

The fact finders in the case will look at "cross elasticity of demand." In other words, they will try to ascertain to what extent terrestrial radio is a viable substitute for satellite radio.

The possible saving grace for the Sirius/XM folks is that antitrust law is so confusing that sometimes the courts - even the US Supreme Court - screw up. There was a case involving cellophane way back when. DuPont was sued for flexing its monopolist muscle in order to force companies out of the plastic-wrap market. DuPont's lawyers were able to convince a jury and subsequent appellate courts that the "relevant market" was all-stuff-that-can-be-used-to-wrap-other-stuff. Wax paper, for example.

This decision, almost universally panned today, is known as the "cellophane fallacy."

Similarly, as DuPont's lawyers argued that wax paper was a viable substitute for plastic wrap, Sirius/XM's lawyers will argue that terrestrial radio is a viable substitute for satellite radio. Ironically, that's exactly the opposite of what they've been telling their customers.

Sea Ray
02-21-2007, 05:27 PM
he's the reason that sirius is the one doing the acquiring and not being the one that's acquired...


You don't think that maybe he could have been lured for say $100 or $150mill?

A lot of folks listen to Howard Stern but no way has he been worth $300mill to that company.

Sea Ray
02-21-2007, 05:38 PM
One of the first steps in antitrust analysis is to determine the relevant market.

The lawyers for the merging companies will argue that the relevant market is "all radio."

The lawyers for the Justice Department (who are supposed to represent consumers) will argue that the relevant market is "satellite radio."



This will be interesting to follow. As a consumer, I'd love to have one company provide me with the combined programming of XM and Siruis. But I wouldn't be too pleased if year after year they continue to inch prices up like cable companies do now. Competition has kept their monthly subscription fees qite stable thus far. I wonder how much it'd cost for one provider to give us the combined programming of the two? They're losing money as it is, my guess is it'd be at least $20/mo and that's assuming they can down size quite a bit. I'd look for that to inch up in the ensuing years after they get established as one monster satellite co.

oneupper
02-21-2007, 05:58 PM
Nice post chili.

If I were a regulator, I'd be inclined to block this, due to the nature of the business.

Unlike public utilities which tend to be natural monopolies (gas, electric and cable to a point) there is no "build out" to the consumer.

In that sense, satellite radio is more like cellular service, where you build the infrastructure and hope that customers will come. Imagine if Cingular, Verizon and Sprint decided to merge to save "network" expenses.

XM and Sirius have overspent trying to outdo each other and hasten growth. The media will probably catch on, but it needs to run its course. Imagine if cable networks had gone after the biggest network names in the 80's. They probably would have gone the way of the USFL.

That said, I expect the deal to be approved. It seems to be the only way to save these two from killing each other.

WMR
02-21-2007, 06:04 PM
One of the first steps in antitrust analysis is to determine the relevant market.

The lawyers for the merging companies will argue that the relevant market is "all radio."

The lawyers for the Justice Department (who are supposed to represent consumers) will argue that the relevant market is "satellite radio."

If the latter argument prevails, then the merger is toast.

The fact finders in the case will look at "cross elasticity of demand." In other words, they will try to ascertain to what extent terrestrial radio is a viable substitute for satellite radio.

The possible saving grace for the Sirius/XM folks is that antitrust law is so confusing that sometimes the courts - even the US Supreme Court - screw up. There was a case involving cellophane way back when. DuPont was sued for flexing its monopolist muscle in order to force companies out of the plastic-wrap market. DuPont's lawyers were able to convince a jury and subsequent appellate courts that the "relevant market" was all-stuff-that-can-be-used-to-wrap-other-stuff. Wax paper, for example.

This decision, almost universally panned today, is known as the "cellophane fallacy."

Similarly, as DuPont's lawyers argued that wax paper was a viable substitute for plastic wrap, Sirius/XM's lawyers will argue that terrestrial radio is a viable substitute for satellite radio. Ironically, that's exactly the opposite of what they've been telling their customers.

Have they proclaimed satellite radio as a far, far superior option? Yes.

Have they attempted to deride terrestrial radio as a non-viable alternative? No.

goreds2
02-22-2007, 08:54 PM
I am "OK" with the merger as long as my existing XM units (2 - MyFi's) will still be able to get the appropiate channels.

I don't want to have to be forced to buy new receivers. :thumbdown