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XM, Sirius announce merger

Electro Funk

Electro Funk

macrumors 65816
Original poster
Dec 8, 2005
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The Opium Garden
:eek:

http://money.cnn.com/2007/02/19/news/companies/xm_sirius/index.htm?postversion=2007021914

NEW YORK (CNNMoney.com) -- Rivals XM Satellite Radio Holdings Inc. and Sirius Satellite Radio announced Monday they would enter into a merger of equals, creating a satellite radio giant.

XM (Charts) and Sirius (Charts) said they would each own half of the combined company, which would have a market value of roughly $13 billion, including approximately $1.6 billion in net debt.


Shock jock Howard Stern has been widely credited for much of Sirius's success, helping the satellite radio operator finish 2006 with more than 6 million subscribers.

As part of the deal, XM Chairman Gary Parsons would remain chairman of the combined firm, while Sirius' Mel Karmazin would assume the role of CEO. XM chief executive Hugh Panero will remain as CEO until the merger is completed.

The two companies, which have a combined 14 million subscribers, said they had not yet determined a new name for the combined company or where its headquarters would be located.

XM shareholders would get 4.6 shares of Sirius stock for each share of XM they own.

"This combination is the next logical step in the evolution of audio entertainment," Mel Karmazin, CEO of SIRIUS Satellite Radio said in a statement.

The deal would also provide listeners a substantially wider variety of programming. Sirius is currently home to shock jock Howard Stern, while XM boasts a number of shows hosted by high-profile entertainers such as Bob Dylan.

"The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago," Parsons and Panero said in a joint statement.
 
There's a shocker :eek: I wonder if this means satellite radio is coming to the iPod eventually, seeing that there's only one company to work with and less problems to overcome.
 
Engadget floated this rumor a couple of months ago. I thought it was sketchy at the time, but apparently not.

I don't much care, though. I keep my iPod plugged in at all times. Never listen to radio unless I need travel alerts.
 
This is good news but hasn't the FCC said they don't want one company.
 
I've been waiting for this! Lets hope the FCC will allow it, so users can get more choice, better hardware and not have to pick between two companies.
 
EricNau said:
Yes:
"A clause in the Federal Communications Commission ruling that gave the satellite radio operators a license said one company cannot own the other one."
Click to expand...

Rivals XM Satellite Radio Holdings Inc. and Sirius Satellite Radio announced Monday they would enter into a merger of equals...

do i smell loophole?

Besides getting shareholder approval, XM and Sirius will also have to get the endorsement of regulators, including the FCC.

Bank added that as a condition of the merger the Department of Justice might impose some sort of price caps so that the combined company can't raise monthly subscription rates by a big amount, if at all.
 
EricNau said:
Yes:
"A clause in the Federal Communications Commission ruling that gave the satellite radio operators a license said one company cannot own the other one."
Click to expand...
So if they both equally own it they get around the loop hole.
 
Ack! I stayed with XM, to keep Howard Stern off my dial! ;)

I never listed to FM, anymore... XM gives me an 80s station and some new age... that's all I need. ;)
 
So is this gonna mean all new radios or what? If I buy now will I have to re buy after the merger.
 
Aeolius said:
Ack! I stayed with XM, to keep Howard Stern off my dial! ;)

I never listed to FM, anymore... XM gives me an 80s station and some new age... that's all I need. ;)
Click to expand...

i dropped XM and picked up Sirius to keep HS on my dial ;) ... although i would love to have the best of both worlds... my navi has xm integrated into the touch screen (song info, channel, ...etc) which i lost when i went with an aftermarket sirius unit... i would love to have it back!
 
I am happy. This means I can turn the XM on in my truck. I like Sirius programming better than XM so now problem solved hopefully sooner than later.
 
Well now with no compitition in the sat radio arena, they can charge whatever they please without the worry of being undercut on price. Good deal for them bad for the people who like sat radio.
 
RandomDeadHead said:
Well now with no compitition in the sat radio arena, they can charge whatever they please without the worry of being undercut on price. Good deal for them bad for the people who like sat radio.
Click to expand...

The FCC wont allow that to happen...

Besides getting shareholder approval, XM and Sirius will also have to get the endorsement of regulators, including the FCC.

Bank added that as a condition of the merger the Department of Justice might impose some sort of price caps so that the combined company can't raise monthly subscription rates by a big amount, if at all.

if they dont impose some sort of price cap i doubt they will even let the merger happen...
 
RandomDeadHead said:
Well now with no compitition in the sat radio arena, they can charge whatever they please without the worry of being undercut on price. Good deal for them bad for the people who like sat radio.
Click to expand...
But satellite Radio isn't a necessity - it can easily be replaced with regular AM & FM or even alternative forms of music like CDs or iPods.

If they raise their prices people will cancel.
 
If this even passes, which, right now I think is a huge if, the FCC will have restrictions on pricing and all that.

Besides, it would be in their best interests to keep prices low and get more subscribers. They'll make more money having 1000 subscribers at $13 a month than they would having 500 subscribers at $20 a month.


And whether or not it actually is a monopoly is arguable. You have AM and FM (but who would want that?), CDs, iPods, HD Radio, etc. You gotta think outside the box for competition. Another company doesn't need to use satellites to beam music to cars to be competition for Sirius and XM.

Just like 20 years ago, this ATT/SBC merger would have never passed. They would have been the only company to give you phone service. But now, it's more acceptable, because while there may not be any competition on that particular medium (POTS), we have a ton of cellular and VoIP companies to choose from.
 
They want to gain customers so they will keep prices reasonable for at least a few years. Once they get a strong enough base then I might see them raise prices.
 
I dont understand how this is going to happen, I remember when Dish network and Direct TV were going to merge and the FCC stopped them. Is this not the same thing??
 
As long as it doesn't increase subscription rates Im all for it. I have had Sirius for 3+ years and love it. I wonder what the merger would do? Possibly twice as many channels? We shall see what the FCC has to say about this.
 
Less choice is always bad. I 'm going to hate to say goodby to my commercial free music on Sirius. I guess this needed to happen for both to survive, but anyone who things that they aren't going to raise rates is fooling themselves. This will go through on the FCC side, as both of this companies can show so much "hardship" that you have to know they planned this battle way ahad of time.
 
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