This is an old article about the Sirius and XM merger
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Below is the archived article...
Reuters reports: SIRIUS Satellite Radio CEO Mel Karmazin said today at a conference in New York that Sirius is definitely not up for sale. But when inevitably asked the question about an XM and SIRIUS merger, he had this to say:
"Regarding XM - would we like to buy them? Sure. We'd love to buy them. Price would matter, so that would be an issue ... (and) there would definitely be the regulatory issue," said Karmazin.
Mel was very clear about one thing regarding mergers, "If we do another deal, I'm gone." Referring to the stuggles he had with Summer Redstone after the CBS/Viacom merger.
It sure is headline material. "XM and SIRIUS merger?" Stuff that newspapers lap up. But I'm going to go out on a limb here and say I'm against the idea. I've put together a list of 5 reasons why I think XM and SIRIUS should not merge after the jump...
- First off, from a regulatory point of view, this would require some serious arm twisting of the FCC. All one has to do is look at the DISH-DirecTV merger precidence to get an idea of how the FCC feels about these things.
- Second, choice is a good thing. The programming philosophies between XM and SIRIUS are very different, and each targets a different type of person. Some people like XM's music, some people like SIRIUS' music. You can't be all things to everybody. As soon as you try to be, you become boring.
- Third, from competition spawns innovation. If there was just one satellite radio provider, we wouldn't be accelerating at the rate we are. The need to one-up the competition creates incredible devices for the consumer. With one satcaster, there would only be terrestrial radio to contend with, and we all know how innovated they are.
- Forth, stop thinking like an investor and start thinking like a listener. Listeners don't give a hoot about PPS, SAC and CFBE. They care about CONTENT. The content choices create curiosity among protential listeners - Howard Stern vs Opie and Anthony, Martha vs Oprah, etc. These choices create interest and a sense of ownership once the choice is made.
- Fifth, we would price ourselves right out of the market. A merger would equal higher subscription costs, no doubt behind that (remember, these companies are still losing money!). As soon as that happens, the market would get eaten up by competing alternatives (cell phone downloads/radio, iPods, WiMax/Internet Radio, etc.).
But hey, that's just my take on it. Go ahead and disagree, or better yet, give your reasons why you think a merger would be a good thing in the comments.
I suppose in a perfect world, sub costs would be the same, we would all enjoy every sports game imaginable, and how does 300 channels sound?
Not going to happen. i wander how many people will buy that new reciever that gets both? Fuck regular radio, long live satellite!!
Here are some reasons why I disagree with your ideas on a merger. My support of a merger is conditional however.
1. Everything to everyone. Well what is wrong with having Stern, O&A, MLB, NFL, NBA, Nascar,Oprah, Martha,NCAA,NHL, Fox News etc etc etc on one network?? Would that be worth $20 a month, I think so. Thats a product that literally has everything. Exclusive content, ALL sports and a ton of syndicated content.
2. This is the conditional part, If both companies kept their bandwidth they could split the music stations. 35 sirius style, 35xm which now free's 65 channels of music which could now be video. There is your innovative technology.
3. OEM deals. Oh my god we hit the motherload. With OEM deals ramping up at a rapid rate we could have 10-12million OEM installs and 4-6 million OEM subs every year.
4. Satellites. With Sirius' upcoming geo stationary satellite combined with their others and XM's repeater network it seems like we have quite a nice coverage area which would improve service and customer satisfaction. Of course there are tons of other combo's like using XM sats etc.
5. Now we have to think about the stock. 11 million subs currently, sounds like we are already cash flow positive and with the OEM deals in place growth isn't slowing down anytime soon.
6. How about devices now. With the free bandwidth and XM's advanced technology we could have a live streaming Video Inno in a year or two. Record video anyone? The new all in one XM/Sirius radio that records radio, video and downloads MP3's. How about a GPS,Radio,Video,Weather,MP3 player hub in luxury automobiles. Load your Itunes on their and your golden.
I'm talking about a satellite radio monolith. Each of these companies have huge shortcomings. Sirius lacks technology. XM lacks the most attractive content and the marketing know how of Sirius. If you put them together you really do have a company that could be the next Apple or Google.
Competition in satellite is good. The Gang Mentality(think West Side Story, not unhomosexual gangs) is lame.
On the other hand, I could listen to the World Cup game in 10 minutes.
Does anyone believe a word this guy says? He's so full of it, he's starting to believe himself.
Not a merger, but having the companies work together on a 2 service (XM/Sirius) radio and offering both services for $19.99 a month would be awesome !! No merger, but two companies working together to offer the consumer more and make more money at it! Also the side benefit of saying FU to AM/FM broadcasting :)
Does anyone believe a word this guy says? He's so full of it, he's starting to believe himself.
He made the company your two bozos are "taking over the country" with you dolt!
Hey look at Corkey's younger dumber brother up here. Really solid point man.
"He made the company your two bozos are "taking over the country" with you dolt!"
As for the rest of you, this is speculation. The opportunities that could arise are all plausible provided a merger was approved. Its obvious who has lost money on these companies. Iband just because you bought Sirius at $7 don't bring your pointless negativity unless you can back it up. Your post was as worthless as your life.
Though i do have some reservations about a merger, i think overall it'd be a great thing....Joe Blow pretty muched summed it all up.....
Also, as a combined entity the new company would have much greater leveraging power with the RIAA (for recording rights) and the FCC (for additional bandwidth, Sats/Repeaters)
As a former XM sub and current Sirius Sub i'd REALLY like "Ethel" "Fred" and "Lucy" back!!!!!!
this would be a bad move for XM. Sirius is going to fail because they spend their money on washed up old talent like Hoo Hoo and Martha Stewart. Once they go out of business XM will be able to get all the good stuff sirius has like the NFL and nascar. Xm and Free FM are the future of radio and sirius sucks.
" 'Regarding XM - would we like to buy them? Sure. We'd love to buy them. Price would matter, so that would be an issue ...' "-Mel Karmazin
Should be if XM decides to buy Sirius.
Reuters quoted an XM spokesman as saying: "We do not comment on our competitors' wishful thinking."
where would the money come from? both companies are in bad shape and losing cash, but Sirius is still the #2 company. in what Bizarro World does the less successful company buy out the more successful company?
" but Sirius is still the #2 company. in what Bizarro World does the less successful company buy out the more successful company?"
Stupid people, stupid world.
SIRI- Market Cap: 6.60B
XM-Market Cap: 3.71B
dip shit, Siri is the #1 company basis of market value by almost 100%.
i would go into more details about stock leveraged buy outs but it would prob be wasted here
I want to buy XM, too! I WANT A HEADLINE!
Glenn, have you ever heard of a company called K-Mart. Although I believe that it was more of a merger of kmart/sears the news reports say Kmart bought sears. There is your bizarro world.
I disgaree with the original post because I love Sirius. Unfortunately my car has XM factory-installed. It's the only thing about Honda that I cant figure out. It's almost like this is the only part of the design when they had their heads in their bums. It must've been a woman's decision to install XM instead of Sirius in all the new Hondas.
I agree with Joe Blow. As a XM and SIRIUS listener, )I think XM is the the better company) it makes sence to me that a merger would take this country by storm and trully make satellit the radio of choice
I'm so tired of hearing about this. A merger between Sirius and XM would be an unmitigated disater. Look at how putrid terrestrial radio became after a few big companies were allowed to gobble up all the competition. Clear Channel owns FIVE radio stations in NYC. There's almost zero competition between stations - and now the #1 radio market is one of the worst in the country (if not THE worst).
And do you think XM would have gone commercial-free on their music channels if Sirius hadn't done it first - and made sure everyone knew about it? Would XM and Sirius spent so much money on talent if they weren't competing for listeners? Hell no.
And think about all the channels with similiar formats - but totally different music programming philosophies which would be deleted or merged with their former competition. Not to mention the literally thousands of people would lose their jobs - from top to bottom. And that includes programming, fellow listeners, so get ready to say bye bye to some of your favorite programs, personalities and even entire channels if these two companies "merge." It woudnt' be a merger - it would be a bloodbath.
Of course, inevitably - without any competition - satellite radio would quickly lose its edge and become just as bored and insipid as FM is today. Commercials would return to the music channels - and lots of them. And with them would come all the commercial pressures to bring up the ad rates with tight playlists, mind-numbing repetition and dramatically less new music.
To put it simply: a Sirius/XM merger would be a nightmare which would make the Time-Warner/AOL debacle look like a walk in the park. What we really need is MORE choices - not less.
And, if you look at the rare merger in recent memory that regulators actually squashed - the Echostar-Direct TV deal - you'll get a good idea how a proposed XM-Sirius merger might be received.
Anyway, these recurring merger rumors are getting more and more annoying. People love to talk about the possiblities (and there are some intriguing ones) but these pie-in-the-sky scenario-spinners almost never explore all the negative aspects of a merger in a market segment with only two players.
-LT [NYC]
I see today the initial steps being taken behind closed doors with the FCC and other monopoly regulation organizations for the two companies Sirius and XM to merge. This is brilliant from a marketing, sales, and profit standpoint. Regulators will be certain to keep the price of the product in line. However will this let complacency slip in to such a new industry. Competition has kept these two on the edge of product development both in programing and technology. It will be great for stock holders of Sirius, but does it hurt in the long run? Is it too soon? I guess it does not matter if it is a done deal. So just a note to management. You know my opinion! Thanks
An XM/Sirius merger would not be a nightmare. LT previously posted: “without any competition - satellite radio would quickly lose its edge and become just as bored and insipid as FM is today. Commercials would return to the music channels - and lots of them.” 1) satellite is already just as boring and insipid as FM – haven’t you noticed? Except for brief moments, but, whatever. And the quality of Sirius isn’t great, I end up just listening to FM or my CD’s anyway (or Stern recordings I make). 2) commercials on Sirius are like the spam we all used to get, with nothing of local interest. Granted I don’t want to hear another ad for the Redskins, diamonds, or Chevy trucks, but Sirius’s ads for gambling websites are just as useless and repetitive.
What would be great if both Sirius and XM equipment could be used to pick up the merged companies programming. Otherwise all equipment for one or the other companies would have to be scrapped, which wouldn’t make too many users happy.
I think the FCC and congress things would be the major hurdles. As for choice and competition, competition doesn't always mean choice. If neither company is in the plus side yet, then they are both looking for the absolute best programming for the money, planning to add more content later. If they merged, the focus could be more on attracting customers away from terrestrial radio and the OEM deals would be easier. The satellites I would bet are not overtaxed right now so a bit of reprogramming could have each system broadcast the others content, thus making it possible to pick up both menus on one device. Actually, companies could decide on who's platform to use, or develop a third to use, and end up using only one in, say, ten years. Equipment would most likely be upgraded in that time period much in the same way pretty much all tv's accept cable now. It wouldn't price themselves out of the market if they own the market. The same arguement could be said about walmart or microsoft, but they seem to be going strong. I think it would become a lot more attractive to the average consumer and drive sales, being the new "gotta have it" gadget.
I love that they are merging. people here who have posted ignorant things like sirius failing because they spent money on washed up talent is so absolutely ignorant it is laughable. After sirius' signing of Howard and the NFL they went from under 1 mil in sub's to now having over 6 million. If washed up talent brings that much growth then O&A are beyond washed up, they are dead. XM hasn't had the explosive growth but they have the slightly larger sub base, more vehicles come with it, and better music. Sirius has far better talk radio personality's and big sports like NFL and NASCAR. It just doesn't make sense for these two to continue to battle, and I can finally see my stagnant stocks start to climb again. Go Mel!!!!
From the perspective of the consumer, I'm not convinced a merger eliminates the competition. The XM/Sirius combination would still have to fight hard for subscribers that have a multitude of other choices, such as free radio, iPODS, CDs, internet, etc. If subscription rates increase, or the music channels turn to commercials for extra revenue, it would surely slow the growth of subscribers and could even reverse it. Content quality and diversity would need to be maintained to hang on to existing subscribers, and and improved to grow the subscriber base measured in numbers and/or dollars.
If the two merge, I fear O&A will go completely terrestrial, and they the only reason I keep my XM subscription. Sure Stern is a heavy hitter, but after many years I have grown tired of his ego filled rants hipocracies and will not pay for it.
NASCAR is not a sport.
i guess they did merge =)
and for you mr Baldrick5 hmm look who has NFL and Nascar :D
"this would be a bad move for XM. Sirius is going to fail because they spend their money on washed up old talent like Hoo Hoo and Martha Stewart. Once they go out of business XM will be able to get all the good stuff sirius has like the NFL and nascar. Xm and Free FM are the future of radio and sirius sucks."
I agree with the five reasons why a merger should NOT happen. I am so adamantly against this merger that I've actually joined this DC-based student group fighting the merger - C3SR. Anybody else heard of it? I checked out their website (www.c3sr.org) and it's a for real group. Hopefully I can get involved at the core of this fight to ensure this merger never happens.
What else do you all think can be done at the consumer level? I'm willing to try anything.
Clear channel is an exellent example of what mergers do to entertainment. Bad Idea. I got sirius because I like the content. I do no want to lose any thing that I signed up for. Mergers generally mean consolidation, which means layoff for my favorite djs and programmers. XM and Sirius both have heavy metal stations, but I don't care for XM's all that much. For me it comes down to don't mess with my metal.
I've invested quite a bit in XM hardware over the past 8 years for myself and several family members. We love the service. However, I have read that a merger is probably going to mean new systems to receive the service. I don't know if I'm willing to buy more equipment. The other issue is the current bill before Congress...the RIAA is griping again about systems that can record satellite radio content. Until that's settled, I'm suddenly a wary consumer.
But in the meantime, XM Channel 46 rawks!
In bizzaro world what #2 company buys out a #1 company? I do recall back in the 90's a smaller company HP bought out its bigger competitor Compaq. Yes it can happen.
I couldn't be more excited about this merger. Another person mentioned that the only drawback of buying their vehicle was having no choice of Sirius. I realize the value of these OEM deals and in many cases the auto manufacturers chose either XM or Sirius to do business with. When I was car shopping a year ago, I considered Volkswagen and Honda. Volkswagen offered a choice between XM and Sirius, however, the lot was only equipped with XM cars, he said they had a hard time keeping the Sirius cars on the lot. If that doesn't say value, I'm not sure what does.
My Honda did come with XM, I did let the free subscription run out before renewing. Most of the time I use my Sirius portable in the car instead of the XM.
A merger would mean a single subscription for me. Even if there were a price increase, which I doubt in the short-term, I would prefer the combined programming, so long as Sirius programming is the dominant force.
I just located this website and I would like to comment on the quality and content as impressive.
What do we think about the stock values regarding both companies? Does the stock value of both companies get combined since they will merge or will they remain separate? I.E.-SIRI is at 4.oo share and XM is at 14.oo share. Will they combine and go to 18.00 per share?
Thanks for your responses.
Brian
I just located this website and I would like to comment on the quality and content as impressive.
What do we think about the stock values regarding both companies? Does the stock value of both companies get combined since they will merge or will they remain separate? I.E.-SIRI is at 4.oo share and XM is at 14.oo share. Will they combine and go to 18.00 per share?
Thanks for your responses.
Brian
Regarding the merger of XM & Sirius. Why the hell not - they are much more open to new music and artist then Clear Channel and open many more doors for new artist, music & creativity.
Clear Channel created a monopoly through political pull (i.e. owner is from Texas and a good political friend of President Bush) so that's how that happened.
Now I truly believe that if anyone can and wants to block that merger, it would be Clear Channel as it hurts their monopoly that has destroyed the music industry creativity, new artists, new music, and most importantly the music lovers and listeners respect for radio.
So why would CC want to block this? Well first before XM & Sirius there was no other competition or outlets for new music & artist on a National level so if CC can stop the merger - there might be a good chance that XM & Sirius will go out of business or remain small.
What would that mean? CC is the dictator once again and controls everything while all new music and artist lose their new outlets and have to once again beg for breadcrumbs at CC's doorstep.
CC backroom talk:
What a wonderful world and all we have to do as CC is convince the general public that what we did was OK but what they are doing is not OK. "HaHa the public is stupid, fuc em, we are the power to be and all the music industry and general public will listen to us and follow our command as good little idiots do"
Lastly, as we make XM & Sirius them look bad through our control of the media and take the heat off us - we will continue to control and take over everything – radio, music, concert venues, billboards!!! Yes - Yes we are outsmarting everyone – ha ha ha!!! And fuck in the end after we bring XM & Sirius to their knees – we will buy them out too and really fuck the music industry and public!!! Yea that’s it!
Oppose the merger to the end. I'm thinking of switching to Sirius from XM. Can anybody tell me if Sirius, like XM, abruptly cuts off songs before they end? That infuriates the heck outta me.
Sirius offers a "Lifetime Subscription" for about $500. XM does not.
Buy a lifetime subscription from sirius now and you can evade all rate hikes after the merger.
In regards to Brian's question, a very simplistic way to understand mergers and/or acquisitions is that there will be one of two results. Either, XM and Sirius will form a new company, to which they dump their existing stock into, or either XM or Sirius will purchase all of the other company's stock and it will operate under the purchasing company. If they merge, the new articles of incorporation for the new stock will determine how much is publicly offered, and the value will depend on that. I think owners of either company at that point would have the option of cashing out in cash or in the new entities stock. I haven't read a clear analysis of what they are considering in this case, so if anyone knows, please post it.
It seems the majority of opposition to the merger comes from people who do NOT subscribe to either service. For subscribers, isn't a merger a no-brainer? It beats subscribing to both services to get NLF + MLB + NBA + College Football + College Basketball, and all the news and talk stations. As correctly stated many times, Satellite radio competes with podcasts, MP3, subscription music services, cellphone video, and other entertainment technologies,not just terrestrial radio. People are willing to pay for satellite radio for the unique features it provides, and have to accept its limitations. In my opinion, having two competing providers was doomed from the beginning, and I'd rather see a merger than a bankruptcy. If I hear one more "radio should be free" anti-satellite message from the Genesis group, I'll puke. If someone doesn't want to pay for satellite radio, they don't have to, but don't cripple the industry for no reason. The merger needs to be approved, and sooner rather than later.
I have a Honda so I got stuck with a car that had XM factory-installed. I do think that it would be nice if Sirius and XM merged. I love all the Sirius channels and I especially love Sirius when it is football season. If they merged people wouldn't only have NFL/College Football OR MLB but both! Or the packages they are talking about would be nice too.
That being said I would like to comment on the post that Mr. StoopidGuy made. I guess you are what your name is... I am a little offended at your comment that "It must've been a woman's decision to install XM instead of Sirius in all the new Hondas." You're obviously not married or you wouldn't make rude remarks like that. I am a woman and I actually HATE that XM is in all the Hondas. It would have been wonderful to be able to get a great car AND great music.
I agree with Satchick, don't #&*( with my metal!!!!
I could care less about the merger either way, there are enough media formats for everyone to get what they want. Don't like satellite? Then you have FM. Don't like radio? Then you have Compact discs, Mp3 players that come in a multitude of flavors. Not to mention this up and coming fad that is Internet radio. In the end if the merger gets shot down, you will still have access to Satellite radio in all of its current glory.
PS: I think Sirius is pushing hard for this Merger because their golden boy Stern only has three years left on his contract and I don't see him renewing without a Merger or possibly at all.
e 11, 2007
The FCC has opened a "pleading cycle" for public comments on the proposed XM/Sirius merger, accepting comments and petitions to deny until July 9. Responses and opposition to these comments may then be filed up to July 24. Such comments and petitions may be filed electronically at www.fcc.gov/cgb/ecfs or by paper to the FCC's offices.
If you oppose consoidation and corporate monopoly of the airwaves, then let your voice be heard.
First of all, let me being by stating that I do not own stock or any financial interest in EITHER XM or Sirius Satellite Radio. I want that clear so when I go on about this rant people won't say I have a vested financial interest in seeing the merger go through.
First of all, Satellite Radio has competition from FREE/Terrestrial Radio, iPod and other MP3 players, Internet Radio (which in itself is another topic) and CD/DVD sales. The merger would be great on these points:
* Give Free/HD Radio a run for it's money by providing a vast array of channels that are commercial free for music and commercial talk stations that aren't inundated with 22 minutes of ad programming per hour.
* Subscription services such as Satellite Radio, Satellite Television, Cable Television, Newsprint, etc., are given to consumers as a CHOICE as it is: if you don't want it, you don't have to pay for it. It's not the government's business as to what the consumer can and cannot pay for when it comes to entertainment content. Flint Vs. US was a prime example of that in which Larry Flint won a landmark decision that allows for content to be unrestricted to those who are willing to pay to receive it. This content does not necessarily have to be pornographic and the high courts ruled in that respect. At the same time, it is YOUR choice as an American NOT to pay for services that you don't necessarily agree with. Hence, people who don't want to watch TV, don't have to get Cable or Satellite Television. If you've never paid for any kind of subscription to media, you have no right to weigh in on any level why this merger shouldn't go through.
* Programming on both Satellite technologies would be extended to handle the additional "channel" loads that each service current provides. i.e. Howard Stern would be available on XM on an extended station ID on XM receivers, and Oprah would be available on Sirius on an extended station ID on Sirius receivers. New receivers would more than likely be just one of the technologies or combine the technologies to receive both signals on one unit. I'm not sure what Sirius would have in mind, but it would be one that is in the best interest of the company AND consumer, not just one sided. If you've ever listened to the creator of the technology (she's been a guest on Howard Stern and other Sirius talk shows), her ideal world would be ONE company, ONE voice, in a sea of MANY voices in the broadcast industry.
* The NAB (National Association of Broadcasters) has a vested (Clear Channel money) interest in seeing this merger not go through since it believes that it would "stifle" competition. The NAB are a bunch of strong-arm arrogant bastards that are clearly part of the monopoly of FREE radio and is NOT interested in giving up that kind of power they hold over advertisers. Ad revenue drives free radio, and god forbid that they lose that cash cow to satellite radio or Internet radio (which is usually almost ad-free). They have to stick their greedy big noses into emerging technologies because, like the RIAA, they are afraid of change (that's another side rant that I won't even touch). Grow up NAB and get your greedy grubby hands out of this issue and go do something good for a change to make FM/AM radio good - oh, nevermind, companies like Clear Channel and their right wing chronies will make sure that that won't ever happen.
* Lastly, this is a matter of increasing competition in a sea of emerging digital technologies such as Internet Radio and portable digital music players (iPod, Zune) and the newest arena: digital music players on cellular phones. Combining both Sirius and XM will provide a strong CHOICE in which medium people will want to pay (or not pay) for in getting their entertainment. With Sirius testing out video distribution on upcoming receivers, DirecTV and DIshNetwork will have BIG competition in this area. All again, to provide CHOICE in an ever increasing field of portable digital media.
To those college students who are against this: shut your pie holes, you have no idea how bad of an idea it is to stop this merger from happening. It needs to happen, and happen soon. This isn't about some grass root cause, it's about the big conglomerates such as Clear Channel, CBS/Infinity Broadcasting and any other corporate entity that is against this trying to bury an emerging technology that has it's roots in founders that want to go against the grain. If anything, you should be fighting for this merger to occur, not the other way around.
And one last thing:
F Jackie!
In regards to the Sirius/XM stock question. From what I have read the Sirius stock will be the ticker symbol that the merged company will be using.
http://investor.sirius.com/ReleaseDetail.cfm?ReleaseID=230306
Basically stated 1 share of XM will convert into 4.6 shares of Sirius. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.
Mel Karmazin, currently Chief Executive Officer of SIRIUS, will become Chief Executive Officer of the combined company and Gary Parsons, currently Chairman of XM, will become Chairman of the combined company.
With both of these guys at the top we should see the best of both services represented. From my point of view I think the merger is a great idea. I'm tired of having to make a decision between services to listen to the content I want to hear. I'm really looking forward to this a-la-carte offering they are proposing with the merged company. Only subcribing to the channels that appeal to the user. Wow what a concept.
Stop stalling already. Go Merger.
JY in TN
Why is this deal not done yet. Satelite already cometes with terresrial, ipod, mp3 players . N.A.B is off there heads saying satelite won't have competion if they merge. I mean N.A>B is terrestrial radio, they would have spent 10 times what sirius spent on lobbying washington if they didn't find satelite a threat (ergh, competition) to them
i've had SIRIUS for 4 yrs and love it. i would never think about giving it up. its a cheap price to pay for not having commercials. I hate commercials. I love the content, have it in my vehicles, home and anywhere else it would be available.
My concern is that if Sirius/XM don't merge they may BOTH fail and we could end up with NO SatRad. Both are heavily in debt and losing millions daily. With increased competition, such as IPod, the market has diminished in size and growth has slowed down. At best we would end up with ONE supplier. So we might as well get there painlessly and approve the merger.