Analyst: XM, Sirius merger now looks "less likely" - Orbitcast

Analyst: XM, Sirius merger now looks "less likely"

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XM and Sirius Merger

Approval for the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. "now appear less likely" since a decision has been delayed for so long, according to Pacific Crest Washington.

Erik Olbeter, analyst for Pacific Crest, said that "prospects for the merger have become increasingly cloudy" in a research note issued this morning.

Now that we're nearly 13 months into the process, Olbeter says the delay in approval "suggests that the FCC and Department of Justice are having a hard time justifying the deal."

While word has it that both the DOJ and FCC "are inclined to approve the merger," Olbeter says that "an argument for the deal that does not set a significant, far-reaching precedent appears elusive."

Investors don't seem bothered by Olbeter's comments as shares of both SIRI and XMSR edged up during Wednesday trading.

[Barrons]

44 Comments

Another pathetic attempt to manipulate the stock

I doubt he knows anything more than anybody else.

This is pathetic, one guy says it will be approved others say it won't. This guy doesn't know more than us or anything. All of these guys have been wrong so far about possible approval coming soon, why would this guy be any different.

The difference is that this guy says it's not going to happen - and it is not.

haha, I almost missed the little doggy on the wheel to change channels, cool pic.

YAY!

it will happen i will see too it that it does

when i join sirius i will make sure every xm channel is tossed away

This is no more or less speculative than any other tagline that has been here for a long, long time.

Yes it is! No it isn't! Neener neener neener!

Memo to FCC: Just say no, and let both companies get on with the business of making satellite radio as good as it can be. Competition is good!

Olbeter says that "an argument for the deal that does not set a significant, far-reaching precedent appears elusive."

Is that an excuse not to do the right thing? Of course it will set a precedent. They have had long enough to do their homework and get the decision right, so they should go ahead and do it already!

The world of communications is changing, so let's set a new precedent!

In response to "Anonymous Coward": the NAB seems to always enter their sly negative remarks into every comment or response to the SIRI/XM merger. In the cowardly manner just like you did, good example. Thanks!

No lack of subjectivity on this board.

If you disagree with the merger, you're attacked. If you agree with the merger you're applauded at being so darn smart and a visionary.

I've got to tell you folks, you seem to be like sheep who can't accept that there may a counter argument or view point. Your the guys who'd be screaming the world "is" flat if Mel told you so.

Who gives a shit either way about this merger - if it happens, fine - if not, fine.

Pay attention fellas, I keep telling you Mel's rescue attempt of Sirius isn't going to happen. The merger, is and has been, DOA. What do ya think of them apples?

Excellent! Now, iBiquity is locked out of in-dash, as more-and-more automakers go with standard/optional satrad. Too bad, Strubie!

I see a decision by the end of some month in the future.

I doubt this guy has anymore knowledge about the FCC's decision than anybody else does
I think Cramer made a great point last night, about why this merger should happen. He basical argued that Satellite radio unlike Satellite TV would never have a monopoly in any area of this country, because you can get free terrestrial radio anywhere in this great country.

I swear, these analysts seem to go by whichever way the wind blows. I'm sure this guy is making his analysis based on what Martin said on Tuesday. If a person went by what Martin said on Tuesday, I, too, would say the merger is less likely. That is, until the next piece of info about the merger comes out.

>>> He basical argued that Satellite radio unlike Satellite TV would never have a monopoly in any area of this country, because you can get free terrestrial radio anywhere in this great country.

Creation of a monopoly was not the basis for the for the decision to deny the merger of the sat TV broadcasters. It isn't merely a matter of whether there is ONE or THREE alternatives. It is a matter of whether you are significantly reducing the level of competition, and should be intuitively obvious to an idiot that the XM/SIRI merger does just that.

The sat TV merger was denied because of the anticompetitive effects in general, NOT because it would create a monopoly (although, that didn't help their cause any) --

From the Commissioner's statements:

"The combination of EchoStar and DirecTV would have us replace a vibrant competitive market with a regulated monopoly. This flies in the face of three decades of communications policy that has sought ways to eliminate the need for regulation by fostering greater competition. The record before us irrefutably demonstrates that the proposed merger would eliminate an existing viable competitor in every market in the country. The case against approving the transfer application is particularly compelling with respect to residents of rural America who are not served by any cable operator. Those Americans would be left with only one choice for their subscription video service, now and in the foreseeable future. But that alone is not the cornerstone of our decision. At best, this merger would create a duopoly in areas served by cable; at worst it would create a merger to monopoly in unserved areas." -- Chairman Michael Powell

"... this proposed merger will likely harm consumers by eliminating a viable competitor in every market, driving up prices, and decreasing innovation and quality of service." -- Commissioner Kathleen Abernathy

" ... it would be an enormous risk to approve a transaction that results, at best, in the merger of a duopoly into a monopoly in a critical sector of multi channel video programming." -- Commissioner Michael Copps

"I believe EchoStar currently is violating the must carry provisions of the Satellite Home Viewer Improvement Act and FCC rules by placing some broadcasters' signals on a second dish. I continue to be concerned about the burden this practice places on consumers and the impact this discrimination may have on some broadcasters -- particularly public broadcasters. I therefore dissent in part, on the majority's decision not to include EchoStars compliance with its must carry obligations among those issues designated for hearing." -- Commissioner Kevin Martin

can anyone say monopoly?

Cramer's an asshole. His statement is just not true. I've lived in areas of the country that get no AM/FM or over-the air TV. I recently lived in a town with 4 radio stations. 1 NPR, 3 hip-hop/pop. I have zero interest in any of those genre's so for me there was no AM/FM radio there either. There was one rock station if I drove 20 minutes west that I could pick up but its signal would get lost after 20 more minutes of driving. And even if there were more stations it's not a substitute. If it were I wouldn't pay for radio in the first place.

Regarding pfreak's comments, it goes to show what a sham the "localism" argument is, and how willing people are to take the NAB's money to promote it.

Secondly, I just saw the CEO of Exxon Mobil on CNBC- this is a company that makes five million dollars PER HOUR, and this bunch of f&ck ups in the DOJ and FCC have spent more time evaluating this SatRad merger than almost any other initiative I can think of. Our Social Security and Health care delivery should get such scrutiny. But let's face it- money talks, and oil owns America.

Typically, Stack is still going apeshit over the merger- the merger is no longer the issue because it never had a gnat's fart's worth of impact on any US citizen. The issue now is the sloth and incompetence of the regulators. "Vibrant competitive market," your ass. It's bullshit.

Merger or not, the stock value of both companies will rise- once the uncertainty is removed, they can both go back to devoting their resources to growing their brand, or brands, once again. The bureaucrats never had a mandate to drag this out for so long, and should be condemned by the public for having done so.

This ain't life or death- it's radio, putz.

Yes and no.. and maybe.. so there you have it..

"Cramer's an asshole. His statement is just not true. I've lived in areas of the country that get no AM/FM or over-the air TV. I recently lived in a town with 4 radio stations. 1 NPR, 3 hip-hop/pop. I have zero interest in any of those genre's so for me there was no AM/FM radio there either. There was one rock station if I drove 20 minutes west that I could pick up but its signal would get lost after 20 more minutes of driving. And even if there were more stations it's not a substitute. If it were I wouldn't pay for radio in the first place."

- I think its safe to say that we can exclude those that are "banging their sisters in the hills" from the argument ... get on a real highway and Cramer's argument makes perfect sense.

BTW, the deal's going thru with some caveats I'm sure ... they already called for last arguments and 1 of the few submitted was from an Anti-Merger group. Doesn't take a real genius to tell you its going thru in some form or fashion !

In response to the rural argument, did you know that 4-5 million people have access to only 5 or fewer over the air radio stations? For these folks, having access to more than one satellite radio service is a big benefit, as opposed to only one monopoly service.

Why do you anti-merger types continue to state your arguments in a vacuum? Did you not see that the debt ratings for both companies were dropped today -- specifically because the merger might not happen?

You country bumpkins are about to lose BOTH SatRad companies. Your choice is one company, or one company, or maybe no companies. Two companies is not an option, and going forward, it probably won't be. Unless of course Sirius and Slacker co-exist.

Oh, wait. Is that.... competition?

"Memo to FCC: Just say no, and let both companies get on with the business of making satellite radio as good as it can be. Competition is good!"


x2

>>> Did you not see that the debt ratings for both companies were dropped today -- specifically because the merger might not happen?

What, exactly, does that have to do with DOJ's decision process?

Unless one company is going out of business, something that absolutely WILL NOT HAPPEN, NO MATTER WHAT, then the debt ratings don't matter. A Chapter 11, should it come to pass, will not affect the operations of these companies in any way, shape or form. So, how, exactly, is this relevant to DOJ's decision process?

For those who believe that a merger will help the debt situation, it doesn't. Instead of each company having half the subscribers and half the total debt, you end up with one company with twice the subscribers and twice the debt.

There has been no showing that fixed costs can be cut by virtue of a merger, and that is what matters in DOJ's analysis.

This isn't even a close call and would have been rejected months ago had there not been some Anti-Antitrust attorney at the helm of the DOJ's Antitrust Division.

I have said it before and I will say it again, if it has taken this long it is not going to happen and most people realize that. I just don't know why some people think that is a bad thing, it does not really matter at all. NFL would be cool to have but if you pay for satellite radio you can probably afford Sunday ticket, or vice versa for the baseball.

This is what I have been saying, the longer this drags on, the less likely it will happen, and that is a good thing.

I don't care about either sirius or xm--I only want the merger to go through so my stocks will double and then I'm out and both companies can do whatever they want.
I never listen to either of them.
And now you can all make your usual dumb ass remarks because I really don/t give a hoot about a bunch of dumb beer drinking lowlifes.

I don't care about either sirius or xm--I only want the merger to go through so my stocks will double and then I'm out and both companies can do whatever they want.
I never listen to either of them.
And now you can all make your usual dumb ass remarks because I really don/t give a hoot about a bunch of dumb beer drinking lowlifes.

I don't care about either sirius or xm--I only want the merger to go through so my stocks will double and then I'm out and both companies can do whatever they want.
I never listen to either of them.
And now you can all make your usual dumb ass remarks because I really don/t give a hoot about a bunch of dumb beer drinking lowlifes.

What most people are missing is so obvious it's amazing.

The reason this merger is taking so long is not because anyone gives a shit about two poorly run companies that, for all intents and purposes, adds up to a luxury item for consumers. This merger decision really has nothing at all to do with XM or Sirius. It's really about the future of media.

The FCC is actually thinking ,for the first time in their existence, about the drastically changing landscape of media delivery systems. Traditional definitions are no longer going to suffice. Most of this is still a few years off, but this would be the first acknowledgment of that and would serve as a new precedent for the modern era. Whatever decision they make here will be huge. Not for XM and Sirius, but for the future.

If this is what they are actually doing, I applaud them for taking the time to make sure they really get this right. XM and Sirius will have very little affect on anyone. The decision made on the XM and Sirius will have lasting ramifications that will affect many.

I believe the merger will go through. There will , however, be conditions. Hopefully the conditions are not dictated by terrorists like Georgetown Partners but by pragmatic thinking people who have had over a year to think about it. The correct decision seems obvious to anyone who is forward thinking, it's how it gets implemented that really is the only issue.

Ace has written probably the most brillant comment ( March 6, 2008 3:40 AM) that I have read on this site.

A logical, fair, thoughtful remark -- mentioned in a calm tone.

Well done, Ace!

At this point Grinch, I don't care if it is approve, I just want the DOJ to decide. If DOJ accepts the merger then fine, stock will go up. If they don't that is ok too, not the decision I would like to be honest, but will be fine with it. But to have this drag out for such a long time is a bit stupid. How many politicians does it take to turn on the XM/Sirius radio? geez come on how absurd is this Non Decision period. A year! geez. Does anyone take a Year to decide on doctors? buying a house? buying stock? etc...and those things impact your life more than Radio.

To Ace:

I disagree with your very premise, this decision does not take a year, period.

Like the FCC said itself, we have a 180 day turnaround ... the law should stipulate that this occurs.

You think that once a thumbs up is given that DOJ, FCC, SEC, Congress, etc wouldn't have the power to break up a monopoly that developed? ... They've done it before.

Follow the money and the answers on why and who will be there ... follow the money trail ...

That place I was "bangin my sister in the hills" was along Long Island Sound in CT. This was not out in the middle of nowhere

Geez Guys I've been busy as hell trying to save my job on Capital Hill. Tell you what .... when I get into the office next week, I'll flip a coin..... HEADS the merger is approved.. TAILS...No dice!!!!

That's really how we decide... usually we jack-off for oh... say 14-16 months before we do the flip!

I'll get back with you.

Kevin Martin
FCC Teenager

Dear Ace,

My God man... you've put some thought into this.

But reall Dude.... we have no idea WTF we're doing.... we REALLY do just flip coins after 14 months.

You're wayyy to deep man. It's about who gets greased, how we try to look dilligent, how long we can get bribes and what comes up... heads or tails.

Best,

Kevin Martin

"That place I was "bangin my sister in the hills" was along Long Island Sound in CT. This was not out in the middle of nowhere"

-OK, if that was where it was at, you lost radio transmission for like a minute as you went around a cornerand you had need to replace your antenna ... you know that makes a difference right?

"That place I was "bangin my sister in the hills" was along Long Island Sound in CT. This was not out in the middle of nowhere"

-OK, if that was where it was at, you lost radio transmission for like a minute as you went around a cornerand you had need to replace your antenna ... you know that makes a difference, right?

Can some one really explain to me why someone would be against this merger if it did not hurt their business? Base line the only thing this merger does is create a competitor to regular radio. So why would the government oppose that? The monopoly issues is moot.

Seriosly isnt that what we want in this contry,competetion, let the best man win, sorry regular radio, (NAB) you actually will have to get creative, competetative and agressive, then you can win at making money. Face it , radio got stale and complacent and Sat snuck up on them and caught them with the their pants down.

Now they are freaking out, PS Clear Channel owns 5 % of XM...isnt that interesting? What are they waiting for?

And lets just say you are opposed to the merger, you are supporting the type of government that is bought and paid for, either way you lose, cause you are just one politicians pocketbook away from being regulated out of business when one of them gets bought out by their next meal ticket. Good plan!

I love how people say they want the competition of xm and sirius to make it better.

The truth is XM is almost done, with or without this merger there is going to be a monopoly.

The other thing to think about is World Space Inc (WRSP) . I mean they have been in satelite radio for a long long time. They just never gained ground like Sirius. So really there is competition in this space already, its just people ignore it and see what they want to see.

I don't get it? If they merge, 2 companies can compete in the market place. If they don't, 2 companies struggle and eventually fold. Normal radio is free and abundant. XM and sirius are pay services that are, what I consider, a luxury. I personally choose to pay for Sirius, and I LOVE it. Lets say the worst case senario they raise prices......people have a choice to not pay it. We are not talking about oil or water....things we NEED. Come on already....roll with the punches and just approve this deal.