XM and Sirius Announce Merger
After much talk, it was announced today that XM and Sirius satellite radio providers will combine forces and merge. Neither company was profitable yet, but according to this article:
“The new company, whose new name has yet to be announced, would have total assets worth about $13 billion and a shared debt of $1.6 billion. Combining XM’s 7.6 million subscribers with Sirius’ 6 million, the new company could have a total subscription base of well over 16 million by the end of 2007, if previous projections are accurate. “
The article also discusses the regulatory hurdles they are going to have to overcome from the government. I am no legal scholar by any means, but it sure seems like by these two companies merging they would have a monopoly on satellite radio.
“The companies’ plan still faces significant regulatory “hurdles,” according to FCC chairman Kevin Martin, who released a statement on Monday noting that “the companies would need to demonstrate that consumers would clearly be better off with both more choice and affordable prices.”
Meanwhile, the National Association of Broadcasters, representing terrestrial radio stations that compete with satellite, issued a scathing comment which read in part: “NAB would be shocked if federal regulators permitted a merger of XM and Sirius… When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive nationwide systems. Now, with their stock prices at rock bottom and their business model in disarray because of profligate spending practices, they seek a government bail-out to avoid competing in the marketplace.”
The NAB are just pissy because they know terrestrial radio is going away like the Dodo bird.
Eh, who cares about a monopoly… Give a couple million to Bush’s presidential library and it’s done, no problem.
Technorati Tags: XM, Sirius, merge, FCC, Kevin Martin, National Association of Broadcasters
I see you have a grasp of economics in Texas and Washington, D.C.
Unfortunately Vince, I believe it is that way anywhere in this country and probably the world. Oh well…
Well this is fine with me – so long as they keep the programming that sirius has that xm doesn’t… and so long as i don’t have to buy a new receiver for my car – it cost me an arm and a leg at the dealership when i bought the car lol.
Matt,
Unfortunately enough in the long term I can almost guarantee that you will have to buy a new receiver, but no worries. I find it hard to believe the government will allow this merger to happen. Thanks for the comment as always.