February 19, 2007 by Arlen Schweiger
Are you a Sirius fan or do you like XM Satellite Radio? Pretty soon you won’t have to choose.
The companies shook up the audio world on Monday with the announcement that they will merge into one satellite radio provider in a $13 billion deal.
From a financial standpoint, shareholders of each company would get about 50 percent of the combined newly formed operation. Both stocks dipped more than 40 percent last year.
From a listening standpoint, the roughly 14 million combined subscribers would appear sure to get their money’s worth no matter what mix of combined lineup is presented. Could XM subscribers now get Howard Stern? Could Sirius listeners hear every Major League Baseball game? Could this uber-satellite provider deliver more fusion jazz, reggae and 70s glam rock stations than we possibly need?
“This combination is the next logical step in the evolution of audio entertainment,” said Mel Karmazin, CEO of Sirius. “Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies. The combined company will be positioned to capitalize on Sirius and XM’s complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible.”
The FCC and Department of Justice stand in the way as possible deterrents to the deal. The Associated Press speculates that the companies will turn to the glut of digital audio sources such as MP3 players (more specifically, iPods), mobile phones and non-satellite digital radio as overriding factors against antitrust consideration.
The announcement did not say what the company would be called, nor did it talk about subscription prices. At first mention, it sounds like a winner for any music or talk radio fan, though.
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Arlen writes about home technology installations and product news and reviews for electronichouse.com
and Electronic House magazine.
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