Mum’s the word on program specifics with XM, Sirius merger deal

| Thursday, March 27, 2008

For those interested in the possible merger between XM Satellite Radio and Sirius Satellite Radio, there have been plenty of reports and opinions flying since the Justice Department announced it was no longer standing in the way of the deal.

But for listeners who want to know about the future of their favorite satellite radio programs, little information is available now and even less is expected in the near future. Sirius has more than 130 channels, and XM has more than 170 channels. Programming on both includes music, talk, news, weather and sports.

Officials with XM told “Land Line Now” earlier this week that they wouldn’t be making any comments about specific programming until the merger is actually OK’d by the Federal Communications Commission. And once the FCC puts its stamp of approval on the deal, the XM officials predict, it will take some time before details about specific programming are made public.

“Land Line Now” is aired daily on XM’s Open Road Channel 171.

The officials at FCC have not announced when the commission will reveal its final decision on the merger, but industry observers expect it to move quickly. Kit Spring, an analyst at the financial brokerage and investment firm Stifel Nicolaus, told The Associated Press that the FCC will probably OK the deal because it has “never to our knowledge” gone against a Justice Department finding.

In fact, FCC Chairman Kevin Martin asked his staff last week, on March 20, to draft documents on the possible merger. Martin told media at a press conference that day that he had his staff working on documents to cover various possible outcomes because he hadn’t yet made a decision on the merger.

Investors aren’t waiting for Martin’s decision, based on reports from Reuters that showed shares of XM and Sirius surging after the Justice Department announcement on Monday, March 24. Sirius shares were up 9.3 percent to $3.17, and XM shares jumped 18.1 percent to $14.09, both on the Nasdaq.

Much of the Justice Department’s analysis of the proposed merger deals with questions that consumers have been asking concerning whether it would create a monopoly and what current subscribers would have in the way of service if the satellite radio operations combine.

“During the course of its investigation, the Division reviewed millions of pages of documents, analyzed large amounts of data related to sales of satellite radios and subscriptions for satellite radio service, and interviewed scores of industry participants,” stated the Justice Department analysis.

The bottom line from the Justice Department is that the merger won’t result in a monopoly. However, that doesn’t mean listeners will be hearing the sweet sounds of the combined XM and Sirius lineups coming from a universal receiver any time soon.

“XM and Sirius made some efforts to develop an interoperable radio capable of receiving both sets of satellite signals,” stated the Justice Department analysis. “Depending on how such a radio would be configured, it could enable consumers to switch between providers without incurring the costs of new equipment. The Division’s investigation revealed, however, that no such interoperable radio is on the market and that such a radio likely would not be introduced in the near term.”

The AP reported Thursday that when they do become available – probably more than a year after the merger is OK’d – the interoperable radios will likely cost listeners $200. The wait could be even longer for satellite radio subscribers whose vehicles came equipped with hardware.

Thomas Barnett, the assistant attorney general heading the Justice Department’s antitrust division, said that agency officials concluded interoperable radios would take two to three years to be available from automakers.

Following the Justice Department announcement earlier this week, both XM and Sirius told The AP that “no existing radio will be made obsolete by the merger.” The satellite radio providers went on to say that subscribers would be able to receive select programming from the provider that they don’t currently subscribe to on existing radios.

Both companies have stated they plan to offer eight different options that combine their programs, such as a “mostly music” package with 65 channels, for $9.99 a month, which is less than the current flat rate of $12.95. Six of those eight options will be available on current radios.

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