XM/Sirius Merger: The dog that didn't bark
Monday, June 4, 2007 at 11:37 AM
Tags: 2, XM
In a note to clients this morning, Bear Stearns analyst Bob Peck refers to a short story by Sir Arthur Conan Doyle, Silver Blaze, as one of the positives regarding the Sirius-XM merger.
One of the major clues in solving the mystery for Silver Blaze is that the watch dog didn't bark while the act was taking place. And so the dog must have known the perpetrator.
Peck uses this analogy for the merger, because unlike the DirecTV-EchoStar merger, "the Washington dogs aren't barking." Aside from the independent NAB-funded reports, there really hasn't been much in a wave of negative outcry.
Peck also felt that the "delayed" FCC clock may actually be a benefit as well, because if the FCC was out to kill the deal, then "they would have already started the clock." The FCC's own stipulation that 'there can be only one' satcaster most likely is the reason why the clock hasn't started yet, and this shows an incredible level of poise.
Personally, I think the fact that none of the auto manufacturers (nor any of the big box retailers for that matter) have come out against the merger - plays in favor of the merger as well. If GM, Ford or Honda came out screaming against it, saying that a merger would have them by the throat, then the deal would be dead. And that says a lot.
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Comments
The car companies would love to have both XM & Sirius in all their cars ! That's a great way to get car sales perked up. That's a point I missed.
No more "Gee I wanted Sirius" from GM car customers etc.
Posted by: mike | June 4, 2007 12:23 PM
Nice post, Ryan. Very good points all around.
Posted by: Schimshamity ? | June 4, 2007 1:26 PM
Yea, the car manufacturers support seems obvious to me. And it may be one of many obvious reasons the NAB is so against merger. Because without merger, sat. radio will never be "standard" in new cars. There will be either Sirius OR XM, but not just sat. radio. With a merger, sat radio could truly be standard in all cars...
Posted by: rjr | June 4, 2007 2:44 PM
seems to me it would not be very hard for car makers to get an interoperable reciever.....like Mel said he just needed someone(Ford,GM,) to subsidize(sp?) it. meanwhile back at Bears it sounds to me like we`ve got some major spin action goin on.
Posted by: rkb ? | June 4, 2007 3:09 PM
No rkb, you don't understand the dynamics of the situation. GM has an exclusive contract with XM. That contract provides, among other things, that XM is exclusive to GM. It also gives GM a good deal of stock in XM. You can assume Ford has a similar contract with Sirius.
In other words, the market won't allow an interoperable radio unless there is a merger. It just won't work. Unless there is a merger, we won't truely have sat. radio standard in cars. The NAB knows this, and its why they are against merger...
Posted by: rjr | June 4, 2007 10:41 PM
actually that is not what i recall. i remember reading recently that GM in particular has a clause in their contract which would allow them to install sirius if they(siri) were to become the "market leader" i recall someone posted this info directly from GMs contract with XM. its my opinion that none of this really matters (exclusivity)anyway. because if enough money was thrown at the situation we would have seen an interoperable reciever years ago. the powers that be simply did not want it.
Posted by: rkb ? | June 5, 2007 10:55 AM