Sirius, XM Confirm $13 Billion Merger
By Nate Mook and Ed Oswald | Published February 19, 2007, 3:48 PM
Satellite radio providers XM and Sirius confirmed the rumors Monday, announcing a surprise $13 billion merger of equals, which would keep Sirius CEO Mel Karmazin and XM Chairman Gary Parsons in their respective roles.
XM CEO Hugh Panero will not have a role in the new company, which as of yet has not been named. XM and Sirius expect the merger to be completed by the end of 2007, but the companies have major regulatory hurdles to clear first, including permission from antitrust watchdogs and the FCC.
Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.
News of the merger was first reported by the New York Post, which claimed both sides were meeting in Washington, DC to finalize an agreement. Antitrust concerns way heavy on the negotiations, thus lawyers on both sides were working to address.
Between $3 billion and $7 billion could be saved annually with a combined company that would have approximately 12 million subscribers, the companies say. The combination would also merge Sirius' premier content such as Howard Stern and Martha Stewart with XM's, which includes Major League Baseball and Oprah Winfrey.
"We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Parsons and Panero said in a joint statement. "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."
"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," remarked Karmazin. "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."
Do not fall for the naive "nobody is going to pay for radio" thinking - people said the exact same thing about cable TV and everyone reading this likely is paying a monthly cable bill.
I became a Sirius subscriber when Stern moved, and I wanted to keep listening to him and his people. What I found on Sirius is a whole assortment of content, including (commercial free) music, talk, politics, religion, comedy and even children-specific content.
Being able to hear not only Stern, but the additional Stern-related content makes the monthly fee more than worth it for me, and I now have three radios active (two portables, one in the new Durango). Hell, I even love the fact that the radios I use have a memory/playback feature and the ability to tell me when specific content (artist or song) is playing on a channel.
Being able to get my choice of 80s, 90s, rock, pop, metal, dance, hip-hop, etc. channels is gravy, and having KidStuff for when I have the kids in the car is kinda nice, too!
People should really be subscribers to at least one of the two services before rendering opinions on them that do not have much basis in fact. IMHO, Sirius (and I presume XM) offer a lot of decent ad valuable content.
People already pay much more for cable TV, when they are likely only watching that content for a few hours each day. I have been listening to Sirius since my day started (~4AM) and am listening to the 80s channel on Sirius right now at work while typing this! I am getting more than my money's worth here.
I am happy as hell that I became a subscriber. Most other subscribers are, too... At least, the Sirius subscribers that I know and/or have gotten onto Sirius. I cannot imagine going back to plain old radio ever again...
-=- James.
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|*YAWN* They are merging because there are not enough subscribers for 2 companies. Nobody is falling for the "pay for radio" scam.
Everyone just uses iPods for FREE.
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|Like I said before this deal will go
http://www.msnbc.msn.com...wsweek/?bctid=520979042
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|I am not sure where the reference to $19.95 a month came from but if there is any truth to it then consumers (and the sat radio market) will suffer. The market is simply too young to support that much of a price jump. The only way I could see it possibly working is if they allowed multiple radios for that price like the sat tv companies have done.
Like many have said I think for now it is the wait and see..
"The combination would also merge Sirius' premier content such as Howard Stern and Martha Stewart with XM's, which includes Major League Baseball and Oprah Winfrey.",
...Baseball and Oprah are prob not the best examples that they could have used for XM's content.
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|"Together, our best-in-class management team and programming content will create unprecedented choice for consumers,"
WTF? Is this some kind of "Newspeak"
Giving consumers only ONE satellite radio provider to chose from is giving consumers more choices?
No choice = More choices?
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|Orwellian isn't it... that's what the jews do... they own EVERY media outlet and they dictate what the masses will listen to.. and if you call them out on it...you are anti-semitic.. that word association doesn't work anymore. they aren't semetic.. not even close. look up Ashkenazi and Separdic jewry and neither one of them are semetic, which is what 95% of what modern jews are..
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|Have you come into the clinic lately to get your tinfoil hat refitted?
As for your screed....I guess Rupert Murdoch is Jewish as well?
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|WTF is wrong with you? Leave that garbage out of here and go back to your hole.
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|I just check their market caps, and even after this announcement, I see their combine market caps are around 10 billions. Where is the additional 3 billions come from?
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|"Where is the additional 3 billions come from?"
Corporate math, better known as wishful thinking.
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|Just this past weekend I was thinking of switching from XM to Sirius because i am so tired of XM slipping more and more commercials on the so called Clear Choice music channels. In addition, the 70's station now has a DJ almost all of the time, who needs this when the song information is on the radio display? I'm paying for music and thats all I want.
I'm wondering if I can still take advantage of the $499 lifetime subscription on Sirius to avoid monthly increased from $12.95 to what is now projected in some articles, $19.95 per month. And if I pay the $499, then what happens after the merger, is it Grandfathered in?
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|XM has commercials on their music channels? They must be insane. This is especially disappointing considering XM has superior sound quality to Sirius.
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|Most of XM satellite radio is infested with commercials. This was originally a demand made by syndicated programs affiliated with that frigging Clear Channel monolith. Many of the channels are heard for FREE by using the AOL media player.
The Clear Channelization of satellite radio might well be the government's attempt to censor these broadcasts without have to change existing laws to include XM and Sirius. Bubba the Love Sponge's x-rated AM radio program was their product and they have been gun shy, since paying those huge FCC fines that made Howard Stern's innuendos look tame.....
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|Here comes Clear Channel II. More sterile, homogeneous crap.
Another victory for mindless drones who think we have "too many choices."
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|This is a pretty good list of reasons why it might not happen. Just posting as an aside to the thread... http://www.orbitcast.com...why-it-wont-happen.html
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|How much you bet that this deal will be approved by the FED.
Why? simple $$$$$$$$$$$$$
And specially election coming soon, you know how much they will give to wash senators to grant the deal $$$$$$$
You'll see
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|This deal will approved by fed. Simply put, both companies are losing money every day.
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|It will be interesting to see which channels are kept.
XM 41 The Boneyard
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|As a XM subscriber I don't know if this is good news for me or not yet. Kinda undecided as of now.
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|Well I knew this was going to happen... the market for satellite radio is just not big enough to support two companies.
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|You're right especially when we can't get most of everything we want on one service. Its not like digital cable and DirecTV having most of the same channels at different rates. That is the real competition.
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|Huh. Go back and read the original posts when these two first started, and I said they would eventually merge. They did. Now is the time to purchase if you're into pay-radio.
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|Same here. It only makes sense.
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|LOL
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|Okay, so perhaps maybe I was a bit mistaken. In any event, we'll find out soon who's right, if we haven't already.
For now, though, let's just post this one under the watch-and-wait category and see what happens.
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|Oh yeah, I can see THIS happening. And it will happen on the day that hell freezes and pigs take to the sky. :(
Seriously, would the FCC and the Fed permit this? I THINK NOT! I smell a MAJOR ANTITRUST BATTLE coming that will only serve to derail ANYTHING that attempts to eliminate competition. Trust me, the DOJ tore up AT&T over just this kind of thing... and would have shredded Microsoft as well if it weren't for Bill Gates, et al throwing a bone at the courts to force them to go their way.
All I can say is that very soon, you can expect to see a telecommunications/broadcasting/etc. fight not seen since the breakup of Ma Bell... and then they will break up Ma Bell again because it now comprises equal parts of SBC, Bell South and the original Ma Bell.
THEN WE'LL SEE WHO HAS THE LAST LAUGH.
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|Oh yeah, sattelite radio has NO competition. HD radio, FM and AM, Internet broadcasts, audio book CDs, music CDs, IPods, podcasts etc. There's NO WAY the government will approve this LOL.
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|Wow. The use of an inordinate amount of caps really drives your point home. Definitely makes me want to take what you say very seriously. Perhaps decaf is an option?
Either way, XM and Sirius really have their work cut out for them. I can't see the government letting this one slide easily. A one-player game can't be good for customers.
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|Yes, I can see your point. Not!
The probable alternative to their merging is the likelihood of Sirius going bankrupt.
And the net result of that is what? Let me think...its coming....
Wait! I think I've got it!
Yup! ONE company with fewer resources and offerings than a combined more financially viable company! But gee, now I'm really confused, as you said "A one-player game can't be good for customers."
I can definitely see why anti-trust action with one viable company and a failing second company soon to go bankrupt would make more sense! :-O
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|The Government didnt approve the two satellite tv companies directv and dish network to merge, and they have alot more competition from cable companies. Why would this be any different?
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|Wow, with an intellectually stimulating response like that, how could I possibly resist treating you seriously. You have definitely won me over to your point of view.
Enjoy the sandbox. I have grown-up stuff to do.
Buh-bye.
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|You Should by all means attempt to grow up.
Let's see, the sum of your comments are about the number of punctuation marks and your keen observation that a merger will result in one company employed as an argument against the same result if one of two companies goes bankrupt.
In is obvious to all how your one company is a problem compared to a market where only one viable company exists.
I guess it all depends on what the number "1" means...
ROFLMAO!
Good luck trying to find some of that grown-up logic!
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|Because its a Niche market. You cant compare Dish network and directv to XM radio.... I can get XM channels and streaming radio stations over the internet for free... Itunes and other MP3's for the music. With TV its small clips of video and rarely can you find 100% FREE streaming TV (the same channels that are on Sat).
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|What he's saying (in his own colorful way) is that one choice from a company with more resources (the merger) is better than one choice from a company with less resources (the other company dying out).
I'd have to agree with that statement.
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