Feeds

Sirius, XM resort to FCC-baiting merger

Oprah and Howard Stern in 'merger of equals'

Secure remote control for conventional and virtual desktops

As we predicted on Friday, subscription satellite radio providers Sirius and XM have announced a plan to merge in the face of rapidly propagating entertainment delivery platforms.

The combined outfit would be worth about $13bn if the stock swap deal completes, as the two firms expect, by the end of this year. Whether the deal goes through or not, the inevitable antitrust investigation would make that timeframe seem optimistic.

The monopoly-creating plan values XM stock at around $18.40 per share. At time of writing, it had risen more than 12 per cent, but at $15.77 was still a way off the offer price, reflecting market doubts that the FCC will let this one slide. As it stands the regulatory regime for satellite radio licensing forbids the move.

As the buyer in this "merger of two equals", Sirius has had a more muted response from its investors. Sirius was trading up almost 7 per cent at $3.95, but still way short of this time last year, when shares were changing hands for nearer $6.

Terrestrial radio trade association the National Association of Broadcasters blasted the game-changing manouverings. Executive Vice President Dennis Wharton said: "When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive, nationwide systems. Now, with their stock prices at rock bottom and their business model in disarray because of profligate spending practices, they seek a government bailout to avoid competing in the marketplace."

Pot, meet kettle.

There is a glimmer of hope for the merger. Speculating on a possible tie-up FCC chairman Kevin Martin said recently: "The companies would need to demonstrate that consumers would clearly be better off with both more choice and affordable prices." Monopolies are not known for creating the conditions required to drive prices down though.

Rather than stifling such competition and dynamism in the industry, Sirius reckons a monopoly would "create a stronger platform for future innovation within the audio entertainment industry and will provide significant benefits to all constituencies".

Sirius CEO Mel Karmazin, who would hang on to the top spot at the combined provider, also hinted that the much-vaunted advertising-free dogma cold be dropped if the merger is approved, saying: "The combined company will be positioned to...drive increased advertising revenue and reduce expenses." Between them, Sirius and XM would bring $1.6bn in debt baggage to a nascent monopoly. ®

Beginner's guide to SSL certificates

More from The Register

next story
Criticism of Uber's journo-Data Analytics plan is an Attack on DIGITAL FREEDOM
First they came for Emil – and I'm damn well SPEAKING OUT
'It is comforting to know where your data centres are.' UK.GOV does NOT
Plus: Anons are 'wannabes', KKK says, before being pwned
Google's whois results say it's a lousy smut searcher
Run whois google.com or whois microsoft.com. We dare you, you PIG◙◙◙◙ER
Holy vintage vehicles! Earliest known official Batmobile goes on sale
Riddle me this: are you prepared to pay US$180k?
'Open source just means big companies can steal your code.' O RLY?
Plus: Flame of the Week returns, for one night only!
NEWSFLASH: It's time to ditch dullard Facebook chums
Everything hot in tech, courtesy of avian anchor Regina Eggbert
Hey, you, PHONE-FACE! Kickstarter in-car mobe mount will EMBED your phone into your MUG
Stick it on the steering wheel and wait for the airbag to fire
prev story

Whitepapers

Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Mitigating web security risk with SSL certificates
Web-based systems are essential tools for running business processes and delivering services to customers.