FCC Says No to Sirius and XM Satellite Radio Merger
January 23, 2007 1:42 PM
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A monopoly in satellite radio is a big no says FCC
According to several reports, FCC chairman Kevin Martin said that it is
very unlikely the FCC will allow Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. to merge
. Both companies represent the two leading satellite radio entities currently in business in the U.S. and unfortunately, a merger in the eyes of the FCC is an obvious road to anti-competitive grounds.
Both Sirius and XM have been battling it out for the last several years, and in 2006 both companies saw their revenues drop as well as subscriber numbers drop. This peaked a notion in the industry that it was very possible that the two companies were in negotiations to go through a merger.
Share prices from both companies had dropped significantly in 2006, with Sirius shares dropping roughly 38-percent and XM shares dropping a whopping 46-percent of their value. Despite the shares dropping, the two companies continue to operate on speculation of a merger, which was also fueled by remarks made by XM CEO Mel Karmazin and chairman Gary Parsons. With their remarks, shares of both companies jumped last month but have since declined.
It is very unlikely, less than 50-percent chance, that Sirius and XM will receive FCC approval for merger, according to Martin. Even so, both companies will have to pass anti-trust regulations and audits. "There is a prohibition on one entity owning both of these businesses," said Martin.
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Full of Inaccuracies
1/23/2007 3:56:47 PM
First of all the FCC is doing nothing more than speculating here. If a non-elected board of government hacks thinks they will have the last say on what 2 companies do, before they even propose doing it, they are as dumb as their Janet Jackson pursuit would suggest.
Second, the Sirius subscriber numbers are not dropping in the least. They started 2006 with 3.3 million and ended with 6 million. And with that increase in subsribers, reached a positive cash flow in the 4th quarter of 2006. I couldn't care less about XM, nor could a lot of people. Might explain THEIR desire to merge with the up and comer that is Sirius.
Mel Karmazin is not the CEO of XM, but the CEO of Sirius. Pretty simple fact to overlook.
RE: Full of Inaccuracies
1/24/2007 10:56:19 AM
Ummm, where'd you get that positive cash flow for 4Q from? They don't report their earnings for another two weeks. And there isn't a single analyst out there expecting them to have positive earnings per share this quarter... Neither XM or Sirius is going to have a positive cash flow for years to come.
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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