Media 19 Feb 2007 07:30 pm

XM and Sirius Announce Merger

by Sean Hackbarth

XM, Sirius logos

Sure, the markets were closed for Presidents Day but that didn’t stop XM (XMSR) and Sirius (SIRI) from announcing they are combining to become the king of satellite radio (which still doesn’t rise to the level of Sirius’ Howard Stern being the “King of All Media”).

Sports fans won’t have to make that agonizing decision of whether they want a service with for the NFL and NASCAR on Sirius or Major League Baseball and college sports on XM. Women won’t have to fret over choosing between Martha Stewart on Sirius or Oprah on XM.

Blogging Stocks’ Jonathan Berr sees this as Sirius winning the satellite wars. Sirius is paying a premium to XM shareholders and Mel Karmazin will be running the unified company.

Ultimately the two companies have to hope the money spent competing against each other can go to finding a place in the new media world where iPods and broadband cell phones appear to be the choice for mobile listeners. That will be the new company’s argument to regulators who will scrutinize this deal more now that Democrats control Congress. It will be a challenge when FCC chairman Kevin Martin it wouldn’t be kosher for there to be only one satellite radio company. (What if one went under? Neither of them are making any money.) Also, expect Congressional hearings since Republican Sen. Arlen Specter when the GOP controlled the Senate felt it was crucial to waste time bringing in cable company and NFL execs to testify about the NFL Network.

The companies will have to make sure potential subscribers understand the merger won’t affect them if they buy new satellite radios. The smart thing would be to simply broadcast the same signals across both companies’ satellite networks with one system eventually taking over (if the technology permits). I can see quite a few people deciding to wait for the merger to succeed (or fail) because they think one set of radios won’t work.


[Graphic via hypebot.]

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