Sirius and XM just announced that they will extend their agreement to merge until May 1st, 2008. Actually, the verbiage is that the companies "have agreed not to exercise their rights to terminate" but it means essentially the same thing.

The interesting thing is that they chose 2 months as their window of extension. One would hope that the extra time would be enough for the DOJ and FCC to come to a decision, but we thought the same thing back in December as well.

Either way, the saga continues...

March 1st marks the date that Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. could walk away from their proposed merger with no fear of a break-up fee. Not many believe that they actually will, but it's definitely in the realm of possibility.

"You should assume that both companies would be having a board meeting prior to the March 1st drop dead date and after the boards have met that you will hear the result," said Sirius CEDO Mel Karmazin at yesterday's earnings call.

However, according to Financial Times, a source close to the situation said the process might take at least 1-2 months - and definitely less than 6 months - following a decision from the Justice Department. The source said the FCC "commissioners know the issues" and that he cannot see the deal being "tremendously delayed" thereafter.

He said he would advise XM and Sirius to extend the termination date another 3-6 months to be sure and give the FCC time to act.

A second source reports that he heard the DOJ was at an impasse because its staff had leaked information to the press that it did not believe the deal should go through. This is despite Assistant Attorney General Thomas Barnett's desire to push it through, the source added.

[Financial Times]
Thanks Gregg!

Jim Cramer has, once again, used his bully pulpit to criticize the Feds over the protracted delays for the Sirius and XM merger.

This time, he focuses on the Congressmen who came out in opposition to the merger, but who just happen to have received donations from the NAB. The picture you see right there is Cramer raising his eyebrows.

I don't just like this video, I love this video... and it's well worth the 13-minute watch.

[CNBC via Orbitcast Forums]

Once again, it seems like there's an oddly quiet lull in activity.

Who knows what it means (if it even means anything) about the merger. Having had tracked these two companies on a daily basis for some 3.5 years, I've learned that news tends to come in ebbs and flows. A calm is usually followed by a flurry of activity.

As this article points out rather poignantly - no one cares about anything else, except this merger. This week's earnings calls will be no different.

A recent filing to the Federal Communications Commission could be giving us the best hints towards concessions required to allow the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. to be approved by the agency.

The ex parte filing by Public Knowledge, which was made public late last week, disclosed that representatives from the non-profit group (including its President Gigi B. Sohn), met with Michelle Carey (the Senior Legal Advisor on Media Issues for Chairman Kevin Martin).

The purpose of their meeting was to reiterate Public Knowledge's support for the Sirius-XM merger.

Public Knowledge has supported the merger, but with 4 conditions:

• A La Carte tiered programming packages be made available (done)
• Sirius-XM dedicated 5% of capacity to educational/informational programming
• Price freeze for 3-years after the merger is approved.
• Sirius-XM make its devices "open" to allow any manufacturer to develop compatible products

Public Knowledge disclosed that a majority of the discussion was on the 5% of dedicated public channel capacity.

But the most interesting part of the filing is that the FCC asked Public Knowledge about Georgetown Partners' proposal.

Here's a snippet from the filing:

"Ms. Carey asked us whether we supported the proposal of Georgetown Partners L.L.C. that the Commission require the merged company to lease 20% of its channel capacity and a portion of its infrastructure to a minority owned corporation. I replied that the Public Knowledge 5% set-aside proposal was likely to lead to greater program diversity and to programming that would not otherwise be heard on a national satellite radio service. However, we would be open to the Georgetown Partners proposal to the extent that it was conditioned on a requirement that part of that capacity be dedicated to noncommercial programming over which the lessee has no editorial control."
(emphasis added)

In other words, if Georgetown Partners' proposal is approved, PK asks that Georgetown also should dedicate 5% of their own broadcast infrastructure to educational/informational programming. A sound request.

What's interesting is that Public Knowledge was even asked the question to begin with, and that their proposal was being discussed in-depth at this point in time (PK suggested these concessions nearly a year ago).

To me, this is an indication that we're nearing the final stretch (let's hope) and that the FCC is seriously considering Public Knowledge's suggestions. And this is a good thing. I've always found PK's requests to not only be reasonable, but also squarely in the public interest (as opposed in the special interest).

The Washington, D.C.-based public interest group punctuated their filing by pointing that the FCC's denial of DirecTV-EchoStar merger was actually not in the public interest, stating that "as separate companies, the DBS providers have not been able to compete against cable in a way that has lowered the latter's prices."

[Read FCC Filing (PDF)]
Thanks to everyone who sent this in!

Heritage Foundation senior analyst James Gattuso.

Gattuso recently expressed his frustration with the Department of Justice and its laggard pace in coming to a decision for the Sirius-XM merger, stating:

"...rumors of imminent action at DoJ have frequently made the rounds: the DoJ is going to approve the deal, the DoJ is going to reject the deal, the DoJ is going to attach conditions on the deal.

"I'm half-expecting to read that the DoJ's dog ate the files on the deal."

Well said James.

[TechNewsWorld, Photo courtesy of Drama Queen]

Thanks Gary!

A quick glimpse at the Merge-O-Meter shows that it has been 367 days since the Sirius-XM merger was announced.

And the Wall Street Journal Deal Journal Blogs has assembled together an interesting set of metrics that put the whole transaction into perspective.

What Deal Journal did was take a look at all the merger/acquisition activity (courtesy of FactSet MergerMetrics) since the Sirius-XM merger was announced, and they came up with a series of numbers. And since I'm a LOST fanboy, I figured I'd make those numbers look like the countdown clock... just because.

So here goes...

349: The number of announced definitive full acquisitions of US publicly traded companies, since the Sirius-XM announcement.

230: The number of those deals that were completed.

97: The number of those deals still pending.

22: The number of those deals that were withdrawn.

The American Antitrust Institute the other day asked the Department of Justice to file suit against the proposed merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc.

AAI, which filed against the Sirius-XM merger back in June, holds strong to its assertion that the merger would "lessen competition, or to tend to create a monopoly," in violation of Section 7 of the Clayton Act.

As far as I can tell, the American Antitrust Institute holds absolutely no relationship to the NAB, or has any ulterior motives here. They are simply a nonprofit organization that advocates an aggressive stance toward antitrust enforcement.

Under AAI's definition, satellite radio stands alone in its relevant market:

"Although the merger parties posit many alternatives, including everything audio from AM/FM radio, to Internet radio, to MP3 players and iPods, none of these offer the unique nationwide coverage of satellite radio, content, features, and ability to aggregate demand. There is no evidence, as required under the Merger Guidelines, that any of the audio alternatives proposed for inclusion in the market definition by the merger parties constrain the ability of the merged firm to increase prices."

Oddly, I don't see any mention of mobile audio (streaming audio to cellphones) in their letter. Mobile audio, in my opinion, is the most direct form of competition if you want to define it as a "nationwide multichannel mobile audio entertainment subscription service" as the NAB calls it. And with companies like mSpot, who already have over 1 million subscribers (not to mention the backing of several terrestrial radio companies like ABC Radio, Clear Channel and others), it's hard to say that mobile audio is "burgeoning."

Still, of all the arguments against the merger, AAI has consistently given the best ones to support their views. I know I'm from the "pro-merger camp" and all, but I have to give AAI credit for stating their case better than most. It all boils down to how the relevant market is defined, and that ultimately, is up to regulators to decide.

[FMQB, Wired]

Here's an interesting video from CNBC featuring Rebecca Arbogast of Stifel Nicolaus & Co., Mark Cooper of the Consumer Federation of America, and Vince Farrell of Scotsman Capital Management.

Well worth the watch if you have an unhealthy obsession with following the merger.

Sadly, CNBC doesn't allow embedding of videos (because that would just lead to more people watching their ad-supported content, and we wouldn't want that) so go ahead and click the link below to watch the video.

[CNBC]

This morning's Inside Radio newsletter featured an article that stated "Analyst: XM+Sirius+HD is likely" - an article that now appears to have disappeared from their website.

Who knows the reasons as to why the article looks to be missing... but thanks to the beauty of the interweb, it can now be preserved for all posterity to enjoy:

Analyst: XM+Sirius+HD is likely.
Stifel Nicolaus analyst Blair Levin thinks it's likely the FCC will require such a mandate as part of its approval of the deal, as well as a requirement that any new receivers include terrestrial HD capabilities. Meanwhile, U.S. Electronics is pushing the FCC to hold a summit among a number of parties citing a "newly emerged consensus" that a combined XM-Sirius be required to make their receiver technology "open" allowing more choices for consumers. Among those backing the requirement are iBiquity and the HD Digital Radio Alliance.

The report citing Stifel's assertions probably came from last week's note, where HD Radio was listed among a list of several other possible concessions. Others possibilities that Levin included in his report were public interest programming, price freezes, and lower priced packages.

But then again, a headline reading "Analyst: XM+Sirius = Lower Prices" probably wouldn't make Inside Radio's readership too happy.

Thanks Gary!