Analyst's themselves were the ones predicting those
huge synergies.

Where are their breakdown's of the synergies.For example Goldman Sachs states 4.0B in synergies

Analysis

"Last week, our detailed report “Conundrum squared: Why XM and Sirius should wait” (2/11/07) walked through our thoughts on a potential merger. The key question now pertains
to approval chances and consequent share price reactions. In our view, merging platforms could
deliver significant operational, financial, and strategic benefits, likely exceeding $4 billion, though mostly years away."

Others have stated similar synergies. Have the analyst's WHO WHERE SCREAMING FOR THIS MERGER crawled
back in their holes after predicting huge
synergies.

THE ANALYST'S ARE WORTHLESS IN THEIR OPINIONS , WHICH
THEY CONRADICT AT THE DROP OF A HAT !!!!!!

Well, common sense would indicate cost savings thru duplication in marketing, r&d, payroll, contracts, equipment... Advertisement revenue would grow due to higher amounts of listeners on a combined merged company(higher ad rates)--I do think the costs savings wont be realized until several years after the merger but overall competing against free radio/others compared to each other AND free radio/etc has to save in the hundreds of millions easily per year

The availability of interoperable radios will open up the OEM contracts to renegotiation of the subsidies and revenue sharing -- particularly the GM,Ford, and Chrysler contracts. Could be substantial savings.

The savings are not there, and never will be. When Karmazin was asked about it in the merger presentation, the example he gave involved a savings in "catering costs". No shit. That's the best he could come up with?

Analysts have told us about "billions" in Net Present Value savings. But nobody can tell us where those savings are coming from. Merrill's Mancini made what can only be classified as a feeble attempt by arbitrarily slashing numbers (for some unknown reason, beginning in '07, when the merger won't even be completed in '07). Reality: The merger COSTS money in '07, not saves it. And it may we cost even more in '08 if it goes through.

Meanwhile, both companies back off of their previously held cash flow positions (XM delaying until '08, and SIRI just outright refusing to provide any guidance).

The very feature of the XM/SIRI business model that made it attractive (highly-fixed cost structure) is the same one that prevents the synergies from occurring. Fixed costs are, well, fixed. In this case, they are also "sunk" -- the money is spent or committed. At least for the next 4-5 years.

When you have a sizable initial outlay at time 0 as is the case with this merger, and the savings are discounted 5, 6, 7, or more years, it takes a lot of savings to offset the cost of the outlay in NPV terms. By the time the discounted savings begin, we'll be in an entirely new technology era. Who knows WTF will happen.

The deal was stupid. And most likely, contrived by Karmazin as a way to save SIRI's ass given its blunder in paying Stern a billion dollars. Instead of just destroying SIRI, he has now managed to suck XM in with him.

how do you not know it might be the other way around(sirius saving XM??)
The fixed costs do come into play--You have 2 companies that have fixed costs to run their co-s---Now you combine the two--There are redundant costs that can be eliminated so that now lets say--it only costs both half of what it did seperately

>>> There are redundant costs that can be eliminated so that now lets say--it only costs both half of what it did seperately

"Fixed" means "fixed" -- as in, the costs don't go away, no matter what. After the merger, those costs are still there, at least for the next several years.

Surely consolidating mission control and future sats will save a buck or two.

>> Surely consolidating mission control and future sats will save a buck or two.

Future sats? Sure. 15 years down the road (XM has two new sats w/ 15 year lives; SIRI has announced that they plan to go ahead with their launch of a new GEO sat next year -- apparently, this savings is way, way into the future).

Mission control? Yes, eventually. Broadcast facilities, yes. But that's not where the big dollars are. If you want to save money you have to eliminate some of the hundreds of millions a year in fixed costs, which is not going to happen anytime soon. Or, you have to eliminate some of the variable costs -- and yes, you will save some of that (marketing, principally) -- but only after having to step up these expenses in the near term to deal with the loss of business that is occurring this instant due to people not knowing which service to buy.

The expenses that have put SIRI in this predicament (Stern, NFL, and for XM, MLB) are not going away anytime soon.

Bottom line: Some savings many years down the road, at the expense of current customers, pissed off OEMs, and dollars out the door NOW to keep the businesses afloat while the merger is pending.