At long last, an XM-Sirius union?
By Scott Moritz
Don’t hold your breath, but a federal regulator says a final decision may be reached June 30 at the latest on the merger of XM (XMSR) and Sirius (SIRI). While most analysts expect the Federal Communications Commission to sign off on the deal, the question now is what conditions the agency will impose.
“The commission could act by the end of the second quarter.” said Federal Communications Commission chairman Kevin Martin, speaking to reporters at a conference Friday, according to Bloomberg.
The tie-up between the only two satellite radio shops, announced in early 2007, passed an antitrust review by the Justice Department in March and analysts say its only a matter of time before the FCC has agreed on what concessions will be required to approve the deal. The FCC is trying assuage critics who say the satellite radio monopoly squanders the competitive opportunities that were established by having two companies hold dual licenses for radio waves.
Analysts say forcing XM and Sirius to share the airwaves with competitors or outside programmers would address the problem, but it isn’t clear what form that approach would take. In March, Martin said his staff was drafting different proposals, presumably in an attempt to find a compromise that can pass muster with the commission, which is made up of two Democrats and three Republicans.
In recent weeks, lobby groups and lawmakers have urged the FCC to force the combined company to, among other things, return or lease access to some of its radio spectrum and allow satellite radio makers to add features, which could include video and MP3 compatability, into new devices. These moves are intended to stimulate competing services from other broadcasters and new choices for consumers. Another possibility: Reserving channels for public or independent programmers.
Meanwhile, satellite radio subscriber growth has slowed dramatically with the cooling economy and sluggish car sales. The delayed merger decision has started to draw attention to the heavy costs and steep losses that continue to accumulate at both companies. XM is getting static for its first-quarter adjusted net loss of $30.7 million, up from a loss of $27 million in the year-ago period. The company also faces a $400 million loan payment due next year.
And on Wednesday, XM said it tapped $62.5 million of a $250 million credit facility to help fund an escrow commitment with Major League Baseball. In the wake of the move, the company said in a filing that it has asked its creditors to lower the amount of cash required to avoid a default, from $75 million to $50 million, for the next 90 days.
A delayed merger approval with onerous conditions might not have been the big payoff the companies were expecting when they proposed the deal a year-and-a-half ago.
Do not expect any decision before the election. Perhaps we may finaly have a decision in 09.
What will the merger do to the price of their stocks? SIRI?
Assuming the delay has anything to do with HStern (and it wouldn’t surprise me if it does), the truth of the matter is that satellite IS the best of all options- Sirius over XM especially. This would further cripple terrestrial radio, with their annoying commercial breaks. ClearChannel would lose more money than they already have. If anyone out there believes that this delay isn’t politically/monetarily motivated is clearly insane. If the fear is of a monopoly, why not look back at the Exxon/Mobil deal and revoke it? Clearly there is the monopoly. Purchasing satellite radio is a CHOICE, not a necessity. Sometimes the politics of this country sickens me.
This is so sad. When oil companies can merge in a two week period of time, yet this merger has been on hold forever…..government wonders why people have lost faith! The FCC should be punished for taking this long. This is shameful.
AND THEY ALL WONDER WHY THERE APPROVAL RATING IS 13%.
This whole thing definitely reeks of corruption. But hey, anything having to do with politics is pretty much corrupt. Sirius should just withdraw their offer and flip Washington the bird.
check who has the shorts and what relatioship they have to NAB and Martin
This delay needs a complete investigation.
Problem is… there isn’t an honest person in Washington to start one.
sirius is buying xm for the subscribers and for those car contracts. they could really care less about xm’s content besides the mlb contract. when this deal gets done, they will inherit all those subscribers, who will continue to pay their premium because satellite is so superior to any other radio. if they back out of the deal and let xm go under, a lot of those subscribers would hesitate re-subscribing, having to purchase new equipment/re-install/activate. and they would have to negotiate new deals with mlb and anyone else they would want to bring over. in sirius’s eyes, this deal must go through to move forward.
They hope you will get tired of waiting and sell you’re shares then the merger will go through.
The FCC should have had a window to interfere in the merger and once it expires it should make a decision or not interfere with the merger.Both companies are now weaker for this unwarranted delay!
Kevin Martin is sucking up to the soon to be Democratic house, Senate and President. He knows he’s toast and is willing to put his hiney before his obligation to his office.
Where did Bush find these people? … Brownie, Rumsfeld, Cheney, and now Martin. All should be set out at the curb for pick up.
Sad that government officials have spent more time looking at this merger than looking for Bin Laden.
Why 15 months and still no decision? Bcz the decision has been made to let both companies bleed and go down.
Shame on FCC.
GP GP GP(Georgetown Partners) that’s the hold up. They wan’t to sieze and take advantage of the moment. Why should one of the most diversified stocks held by the average person be watered down by giving 20% of the bandwidth away on the cheap. Just because they are a minoirty owned company does not justify this action. I can see giving or leasing to non-profit orgs.,but this is beyond belief! Again it’s the middle class getting the short end. I thought the FCC was making a decision based on the general public. What a shame, the majority of average persons have voiced that they are for the merger. HELLO! HELLO! Can you hear me Mr. Martin. Mel, Get ready to file a lawsuit. Don’t give in,the DOJ has laid the ground work for your case. This country needs to help new inovative industries not destroy them.
the delay is because the FCC doesnt want Howard Stern to make millions of dollars on the stock options he received from Sirius. Its not too hard to figure out
In the of factors that have hurt both companies financial standing of late, deflating the postive impact of the merger, the FCC itself should have been at the top. Those bozos have to know how their foot dragging negatively impacts the shareholders. Get out of the way and let the merger happen already. The market has spoken on “competition” in satellite radio with XM on the verge of collapse. It’s pathetic that the FCC thinks they’re fooling anybody with their “protect consumers” party line. Same for those Congressional jerks in the NAB’s pocket. We’re not that stupid. Really.
Sirius will have the same thing they were trying to accomplish with the merger, without the ala-carte pricing and other concessions.
they wouldn’t have the other half of the satellite spectrum, they wouldn’t have the xm content deals, they wouldn’t have the GM contract and xm would still exist when it emerged from bankruptcy with legal license to the other half of the spectrum.
try again
Notice it’s the socialist politicians who are blocking the merger
The Exxon/Mobil deal took DAYS not months and certainly not over a year. If this isn’t corruption, then I don’t know what is
Waste of time and money…tax payer money.
This should have been hammered out in a week…tops.
It IS ridiculous for an FCC ruling to take this long.
To think that you would let this go on as long as it has when a 3 to 2 vote would get the job done just goes to show that you are a self serving piece of crap Martin. A little weasel that got put in office by Bush. You would never make in the real world.
Somebody’s making a lot of dough to be stalling this deal?
It’s interesting how one of Rep. John Conyers’ main campaign contributors was the NAB/Clearchannel and now he is one of the most critical of the proposed merger. I sincerely hope that this election weeds out the most corrupt of our legislators, including Conyers. Sirius and XM have created their own bandwidth and to tell them that they have to share it with others is crazy.
Enough! Either let them merge or not. This ongoing courtship is wasting too much lipstick not to mention shareholder value. Its time to realize the potential of an XM-Siri merge or watch one of them sink while the other prospers. Lets play ball FCC!!!
I contacted both Senators from my state asking for an independent prosecutor to be named to investigate the cozy relationship between Martin and the NAB. They both responded with a very passive dismissal implying they were going to do nothing about Martin. When does a Senator ever take a firm stand on ANYTHING? When they are lying!! It appears to me that there are improprieties occuring in regard to the FCC’s treatment of this merger proposal, and our elected representatives are going to do NOTHING!! Suggests to me that we need to collectively vote against the incumbent in EVERY election. The longer they are in office the dirtier they get.
The FCC is a joke. Insult to injury we have to pay their salaries and get no representation.Wasn’t that started our country? Mr Martin.
The $7,000,000 that the NAB used to lobby Congress has worked its magic.
Hohum…
We have been hearing for months, month after month, that the FCC will make a decision next month!! There is nothing that requires the FCC to EVER make a decision, and Congress lacks the testicular fortitude to stand up to the FCC and the NAB and force one. Besides, times have changed. Sirius should withdraw the proposal and compete head-to-head against XM. XM will fail in a year or two and then Sirius will have the same thing they were trying to accomplish with the merger, without the ala-carte pricing and other concessions.
Do you think Chairman Martin has any credibility left? … I don’t.
In 2007 he said a decision by year end was possible. In February he said a decision in Q1 was possible. Last week he said a decision by Q2 was possible.
It is apparent that Chairman Martin is both incompetent and that his word means little. This merger is now 440 days long, the longest on record.
The FCC is irrelevant and guilty of extreme malfeasance.
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Over the past several years, Martin has shown his allegiance with Big Money — NAB, BPL, and others. He has manipulated factual information to fit his needs and his wallet. All of this is just a joke to him. What does he care — the longer he drags this out, the more perks he gets from the lobbyists. Who cares about commerce or what’s right, let’s go fishing!!!
If the FCC really wants to do something right, oust him and approve this deal.