Jacoby: Merging was the easy part
Tuesday, February 20, 2007 at 7:01 AM
Tags: 2, XM
Jonathan Jacoby of Bank of America said in this morning's note that contacts in DC maintain that "procedural hurdles could stop a deal from getting through the FCC" and estimates that the probability of getting regulatory approval before the end of 1Q08 is less than 50%.
Jacoby also added that the NAB could seek a legislative solution rather than lobbying the FCC.
Bank of America's contacts in DC believe that Congress could step in to block the merger. The question is whether they would even bother with the FCC, but instead lobby for an amendment to be added to the current bill already introduced to Capitol Hill.
The NAB could lobby Congress to block the merger on the grounds that it would harm localism, which the bill is meant to "protect" anyway.
Jacoby also added that the full realization of the synergies between the two companies, which eh estimates to be around the $5 billion mark, might not bear fruit until the end of the decade.
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Comments
You want to know what else hurts localism (besides it not even being a word)? Syndication, Clear Channel. It is funny that the nab crys but refuses to fix what has been broke for a while.
btw, if the merger does go through what are the chances that the regular track reports (not xm's gps traffic system) might have to be taken away. What blows my mind is that the sirius traffic reports that I get are 100% more accurate than my local ones.
Posted by: another thought | February 20, 2007 7:18 AM
Jacoby has been on the wrong side of this entire deal and now has egg on the face.
Posted by: Plowboy1 | February 20, 2007 8:23 AM
You know who will have egg on their face if this goes through? Us - the consumers. We are the ones who stand to lose a lot if the FCC grants this, which I highly doubt they will. Anti-trust issues alone will prevent this. I hope the NAB and other band together and stop this. I certainly don't want to pay more for less and get caught up in the legal battles. I want to listen to the music and shows I've signed up for. PERIOD. I'm sure many other consumers feel the same way.
Posted by: SatRad Chick | February 20, 2007 9:40 AM
Jokaby's comments that synergies might not bare fruit until the end of the decade. The end of the decade is only 3 years away; approval is a year away, so 2 years after that. Not so long to wait considering neither company will be profitable until then anyway. We've been waiting for 6 years for these companies to turn a profit, what's another couple of years if that profit is $5 billion higher (NPV).
Posted by: Anonymous Coward | February 20, 2007 1:05 PM