• Get involved.
    We want your input!
    Apply for Membership and join the conversations about everything related to broadcasting.

    After we receive your registration, a moderator will review it. After your registration is approved, you will be permitted to post.
    If you use a disposable or false email address, your registration will be rejected.

    After your membership is approved, please take a minute to tell us a little bit about yourself.
    https://www.radiodiscussions.com/forums/introduce-yourself.1088/

    Thanks in advance and have fun!
    RadioDiscussions Administrators

New York Post claims XM Sirius merger is imminent

Merger of Equals?

It's a "merger of equals", but:

"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."

I find some odd calculations going on here. XM is currently selling at 14.10/share. Sirius is going for 3.71/share. 4.6 x 3.71 = 17.07. Something doesn't add up here.

There are going to be a LOT of issues to resolve. Beyond the obvious problems with the business side, there are issues with both the FCC and the Justice Department's Anti-trust Division, as well as incompatible technology in their programming delivery systems. Is everybody going to have to buy a new satellite receiver to get a full range of programming? What channels will you get with your current subscription?

Imagine the contract negotiations with car manufacturers who thought that they had exclusive deals with either company, and with talent like Howard Stern who had escalator clauses based on increases in listener subscriptions.

We won't even talk about the valuation & debt numbers. I'm not sure that they're taking everything into account when they tell us that they have a "combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion".

Expect a long, hard road before this deal gets done.
 
Re: Merger of Equals?

I doubt there will be much contractual difficulty with either Stern or car manufacturers. Merger speculation began almost at the same time that the companies launched. Contracts probably have clauses dealing with the possibility of merger.

As far as hardware compatibilty. Whether or not the merger happens, they will develop hardware that can be used with either service. The current arrangement is stupid. It's like having to decide whether to buy an AM or FM radio for your car, with no option for having both in the same unit.

They have not announced a name for the combined company. I'd go with XM. It's a far better name, the logical extension of AM and FM. A brand new name would be crazy since to do so would be to throw away the huge investment they've made in both of the other names.

The real problems will be the regulatory hurdles. You never know, but I wouldn't bet on this going through.
 
Not surprisingly...

Radio & Records said:
NAB, FCC Respond To Satcaster Merger Not unexpected, the Sirius Satellite Radio/XM Satellite Radio deal was met with immediate resistance from the powerful National Association of Broadcasters. FCC chaiman Marrtin says the commission will determine "whether or not approval would be in the public interest."
Click to expand...

You can bet the NAB is going to be hitting the halls of Congress to lobby against this deal. So what does a Democratic controlled Congress do? Democrats are already on record opposing mergers in the terrestrial radio spectrum. What's good for the goose is good for the gander.

SirRoxalot said:
I find some odd calculations going on here. XM is currently selling at 14.10/share. Sirius is going for 3.71/share. 4.6 x 3.71 = 17.07. Something doesn't add up here.
Click to expand...

It may be an "incentive" to push the deal, or it could be that Sirius is "purchasing" XM at a premium share price. We'll know more Tuesday, when the markets open and the real money pros tell us what they think by virtue of where the share prices go.

[/Mike Radknowski, Buffalo]
 
Re: Merger of Equals?

The real problems will be the regulatory hurdles. You never know, but I wouldn't bet on this going through.
Click to expand...

Why not? I think this will go through. Truth is, they aren't an industry in and of themselves, although they'd like to believe they are. They are part of a much bigger picture that includes AM, FM, Satellite, Internet, Podcasting, Cell Phones, etc. They are one small part of the audio entertainment picture. I'm sure when it gets down to it, they'll merge.

Just my opinion...
 
Re: Merger of Equals?

Rico Garcia said:
Why not? I think this will go through. Truth is, they aren't an industry in and of themselves, although they'd like to believe they are. They are part of a much bigger picture that includes AM, FM, Satellite, Internet, Podcasting, Cell Phones, etc. They are one small part of the audio entertainment picture. I'm sure when it gets down to it, they'll merge. Just my opinion...
Click to expand...

Well, my opinion is the same as yours. But if I made bets based on my opinion of what should happen, I'd be disappointed quite often. Yes, the satellite business is part of a much bigger picture that includes all of the alternative delivery systems you mention. If the government understood this, terrestrial radio would also be allowed much more consolidation. But we're talking the government so politics, not logic will determine the outcome. It is widely speculated that they are proposing this now because after the election, it might be even tougher under a new, possibly Democrat, administration.

As today's Wall Street Journal says: "A larger problem for the companies (XM and Sirius) however, is the opposition by broadcasters, who are particularly close to Mr. Martin." (FCC Chairman). "With the FCC currently immersed in what's likely to be a protracted fight over changes in media-ownership limits, it may not be an auspicious time to propose a deal to consolidate the satellite radio industry."

It could happen, but I'm skeptical. If it happens, great. But if not, the investors in XM and Sirius are completely hosed.
 
Satellite Merger Story Update

Rico Garcia said:
Why not? I think this will go through.
Click to expand...

Salty Dog said:
It could happen, but I'm skeptical. If it happens, great. But if not, the investors in XM and Sirius are completely hosed.
Click to expand...

Story Update

Analysts Doubt XM-Sirius Merger Will Fly

By Sam Diaz
Washington Post Staff Writer
Thursday, April 26, 2007; D08

It is unlikely that federal regulators will give a thumbs-up to a proposed merger between the XM and Sirius satellite radio companies, according to three analysts' reports issued this week.

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/25/AR2007042502590_pf.html
 
The Feds better approve the merger or I will be writing to Washington demanding a complete overhaul of the FCC. Not approving the merger will be the last straw for me. I've had about all I can take of the FCC defacing our Constitution.
 
Brian Donegan said:
The Feds better approve the merger or I will be writing to Washington demanding a complete overhaul of the FCC. Not approving the merger will be the last straw for me. I've had about all I can take of the FCC defacing our Constitution.
Click to expand...

You DO realize that the licenses were granted with specific language PROHIBITING such a merger, right?

Are you just as in favor of the merging of terrestrial broadcasters, ala Telecom '96?

And exactly which part of the constitution are you alleging defacement?
 
That is a valid point first of all but the market was different when they both started was it not? There was not HD-Radio, Wi-Fi Radio, no I-Pods, and tons of Internet Stations that Sirius/XM have to compete with. Approving a merger between the two services will not lower proces on the medium but would influence change in other areas of entertainment. Programming is going to be ala carte. If the conumer loves it ons Sirius/XM they will demand it from Cable TV. Wow...that creates more freedom and more choice for the consumer, doesn't it?

And I am specificly talking about the 1st Ammendment. the FCC controls content and censors way too much. the FCC forgets that radio dials and off switches were invented, not too mention Parental responsibility. Government has way too many other issues to attend to instead of media censorship. No wonder we have a huge Fed defeceit when we concentrate on such nonsense.
 
Status
This thread has been closed due to inactivity. You can create a new thread to discuss this topic.


Back
Top Bottom