The eternally soft-stepping M&A Researcher has come out with an analysis this weekend stating that the chances of the Sirius-XM merger passing regulatory muster have been reduced now, thanks to its lengthy delays.
M&A's reasoning is multifold, but the end result is that they put the chances at approval at less than 33% - in fact, they ultimately give it a 1-in-5 chance of success.
In my opinion, I feel the delay bodes well towards the final approval of the deal - in that, there's a chance that someone got wind of approval and opponents are now working towards concessions to scuttle the ship. Hints at surrendering spectrum having been the "end game" strategy all along even further solidifies this feeling. But, M&A also has a good point that the Sirius-XM merger will likely be the last deal the DOJ/FCC will decide. And love 'em or hate 'em, M&A has been pretty accurate up to this point.
I think it will pass... This is like one of those long drum roles that they play before the diver dives into that little tank of water at the circus... it's like that because the merger is like that.. so important to so few people..
Please - please - let this thing die already.
Please - please - let this thing die already.
Yes or No, doesn't seem to much to ask for 1 year out? My empathy is with employees of the respective companies, 1 year and no conclusive information or decision. I've made money, short and long, but this is getting stupid.
Yes, please return the Sirius spectrum and rename it Ibiquity Satellite Radio or Clear Channel Satellite Radio. Maybe RIAA Satellite Radio? Big Brother and big pockets rule. This is America's business ethic at its finest. The company with the richest stock and largest debt wins. Let's get more vulgar than ever before.
No matter what, the worst thing is dragging this out. The FCC NEEDS to approve this. As a Sirius CUSTOMER, I'm pissed off that I don't have the XM content I was expecting already. YTF can't I have baseball? How absolutely unamerican.
When was the last time a monopoly benefited a customer? If they have to surrender spectrum then I really don't see them agreeing to it and are hoping that by waiting it out one or the other company will drop the merger plan.
We can only hope!
Mat - you can have baseball and XM content. Get an XM sub. It's easy. Sirius won't be getting XM-exclusive sports content after a merger unless and until the sports contracts are re-negotiated to include this provision in the future - for lots more money. This deal was going to be a tough one to complete from the very beginning since it requires a substantial change in the conditions of grant of the two satellite companies' licenses. And the FCC does not NEED to approve it. It really doesn't. It needs to do what is right, give each of the companies an opportunity to walk away, if they don't, shoot it down.
I'm worried about SatRad changing too much if the merger gets approved. They might be forced to change content and have less XL stations and we might see more commericals. I have no proof of this but it's a possibility.
@GDiamond
Under what circumstance or fact do you hold that a merger would NOT bring over baseball and hockey? You're on crack if you think a merger voids that.
@Mat
Why would you think that Sirius could just, out of the blue, start broadcasting MLB without paying for it? MLB's contract was with XM, NOT with Sirius. Why would MLB just give their broadcast rights to Sirius?
The same is true of NHL. The same is true for XM and NHL.
Maybe they'll reach agreement with some and not others. Perhaps Stern is an exception (Mel has said so); but a merger between XM and SIRI doesn't just magically give rights to Sirius that they haven't paid for.
I'm amazed at the number of people who think the merger means they will start receiving XM content on their Sirius receivers.
Actually, Mat, I spent forty years in professional broadcasting. During that time, I had to inspect and approve many pro sports and college sports contracts. They are huge, carefully-written contracts, designed to convey certain rights to the broadcaster. If the deal is with a certain Clear Channel station, that does not mean that ANY Clear Channel station can carry the broadcast. Just because the two companies may be under the same banner does not mean that any station under the banner is entitled to those rights.
And I'm not on crack.
Prozac, you should absolutely be worried that more commercials will show up on sat rad. Think of it this way, right now the major reason XM doesn't have very many commercials is because Sirius doesn't, and vice-versa. Once they're allowed to merge, their primary competitor will be regular radio stations, which run about 12-16 commercials per hour. So, the merged XM/Sirius could easily increase the humber of commercials to 5 or 10 minutes per hour without losing subs to regular radio, especially since XM and Sirius' own data says that lack of commercials is not among the top reasons why subs sign up for sat rad. Instead most say its the unique content like Stern or sports.
so what your saying is more money will be spent by sirius or XM to get the full sports packages broadcasting on each.
I hope sirius has gets the oppurtunity to walk away rather than the FCC just coming out with the news to deny the merger. It will have a different toll on the investors depending which way the news is delivered. But Mell needs to have some pretty good news ready to go when the time comes. Make people forget about the merger ever happening.
Also Who ever says the "monopoly" wont benefit consumers...then the FCC needs to just make a deal stating that the deal can go through under these terms...la carte and no price raising for so many years, people must be rebated for new devices, etc. Make it appeal to consumers and stop wasting time with tax payers money. I mean wtf do these people do all year round? I understand its a big decision that will change the industry, but nothing is being done...the time they took to do this proves that.
@gdiamond and @stackpointer-
You are both correct and wrong. But you are silly to believe baseball or other sports won't be available to all subscribers of a merged Sirius/XM in some way. Yes, there will be contractual issues, but they can be dealt with, easily. For example, new "dual-band" radios will become available very quickly after merger. This will allow Sirius customers access to XM's content. Yes, you may have tol pay a little more for XM's content, but I believe there will be no need to re-negotiate contracts with the providers, since baseball will still only be on "XM."
But even if such negotiations are necessary- how hard will those be? One thing we know about Mel- he loves to negotiate. He will get the rights to broadcast certain games on Sirius- I guarantee it. There will probably be a "Sports package" available that will offer all types of games. Re-negotiate away. Sirius/XM will charge an additional fee for the content and baseball and Sirius/XM will make more money. Baseball isn't going to turn down additional money. Trust me.
Look - no one knows what is going to happen except that each company will have massive, massive layoffs of staff. A merged company or two stand alone companies, it doesn't matter. These content deals killed the business model. Stern, Hockey, MLB, NASCAR, NFL, Oprah - who gives a damn?
The programming is not copelling if you've been with either service for very long. It's boring and repetitive.
What will happen to XM if they do not merge?
The FCC demanded the dual radio and that is death for XM.
Sirius has every right to do what the FCC said they had to do.
I doubt the FCC wants the mandate they set in place to end up killing XM.
either way...there will be only one sat company assuming xm goes bankrupt. But then what? They divide Sirius?
I've said it before and I'll say it again.
The FCC originally offered up 50 MHz of spectrum and scaled it back to 25MHz. With all the opportunists clamoring for a piece of the pie, why the heck can't the FCC just offer up some of the original 50 MHz of spectrum? This would server two purposes. All these other parties that now want a piece of SIRI and XMSR's spectrum can then bid for the new spectrum and earn their business. This would also eliminate the so-called monopoly tag once and for all. Everybody wins!
"right now the major reason XM doesn't have very many commercials is because Sirius doesn't, and vice-versa"
Seriously? No, they don't have commercials because that's a big selling point, if not the biggest selling point, for people switch from terrad to satrad.
Even if you classify satrad as a separate market, that doesn't exempt them from the fact that they have to sell subscriptions to make money. If they could convince people that free radio and iPods don't exist, then maybe they'd be able to sell commercials for $13/month.
Hi -- has anyone here attempted to read the original article by M&A Research?
An anonymous MAR LLC somewhere in Virginia?
Nowhere to be traced on Google?
Charging $ 5,000 pa for all reports?
No author's name?
Qouted frequently on Seeking Alpha?
Check here -- http://seekingalpha.com/symbol/siri
and sort on the anonymous MAR...
Check all their reports:
http://seekingalpha.com/author/the-m-a-researcher
Go to their site and find these are their 'contacts' :
Phone: 804-304-8507
Fax: 641-453-8527
Email:administrator@maresearch.com
Wow, a phone, a fax, an emailaddress out in the sticks...
... and they have opinions on $ 4.7 bn merger..?
Their subscription Agreement is 'governed by the laws of the Commonwealth of Virginia'; no address given, no directors, authors names mentioned.
Who are they anyway?
Why give them any credence?
How desperate for news are we?
If 'they' are right - the aliens - the merger approval odds have slumped to 1-in-5 equals 20%. Wrong.
There is only one (1) merger - so changes for approval are 50% repeat 50%.
Agree?
Isaac
AntiNAB - there is no other spectrum available for satellite radio. The other 25 MHz of spectrum that the FCC took back in the 1990's is now devoted to WIMAX, those companies paid for it just like XM and Sirius paid for theirs. Some of it went for public safety, so that's not available either. The FCC will not allocate more spectrum for satellite radio. The portion of the spectrum band that is suitable for sat rad service is all gone. There's other parts of spectrum available but nothing that would be suitable for sat rad.
Some really great posts here today....thanks Jose for the feedback
"spectrum that the FCC took back in the 1990's is now devoted to WIMAX"
Jose, I didn't know that. Now let me pose another question. How is it that Slacker is going to offer satellite radio service? Are they using unused spectrum from other satellites? And why couldn't some of these other opportunists like Georgetown do the same? Could it be it might require some real investment and hard work? Don't get me wrong, I'm all for allowing a half a dozen stations for education as our friend Gigi suggested, but these requests by others are getting absurd. It sure makes you wonder if it's just a coincedence that all this noise has come near the merger deadline/renewal date?
I don't know if I would rather see 20% of the spectrum relinquished immediately or have the one license terminated in say 10 to 15 years. Hopefully, whatever negotiations are taking place, Karmazin or Parsons will work out a deal to please Stock holders, subscribers both current and future, employees, and partners. The heck with the NAB.
Anti-NAB...It wouldn't surprise me that once a decision is made regarding a merger, Karmazin is out of there. He will strap on his golden parachute and jump. Whatever happens, he won't be around for that long because he is 64 years old. So don't depend on him doing much, if anything, long-term for either of these companies whether they merge or not.
Isn't it comforting to know that the FCC is so rigorous in it's determination to do the right thing, it's taking longer than the President and his staff to decide whether to attack Iraq? I never saw such due diligence on the part of a beaurocratic enterprise before. Mr. Martin, the nation is in your debt.
This so-called research outfit is in the middle of nowhere...
View Larger Map
I think it's fair to say that this is not a very reliable piece of information.
The MA reseacher is operated by David lee trout who has the same birthdate and lives in the same town as this guy. A simple yahoo search Of David Lee Trout VA provides this result.
http://sex-offender.vsp.virginia.gov/sor/servlet/SOR?id=X00100006
"Why would you think that Sirius could just, out of the blue, start broadcasting MLB without paying for it? MLB's contract was with XM, NOT with Sirius. Why would MLB just give their broadcast rights to Sirius?"
sirius is buying the company and if their contract negotiation team had any brains the terms of the agreement would be grandfathered in with any buyout.
you buy all the assets of the company which includes all current contractual arrangements.
if they allowed MLB to put language in that would prevent this then they are retarded over at XM
http://sex-offender.vsp.virginia.gov/sor/servlet/SOR?id=X00100006