DOJ OKs XM-Sirius Pairing
by Mike Farrell -- Multichannel News, 3/31/2008
The long-awaited merger of XM Satellite Radio and Sirius Satellite Radio cleared a major hurdle last week, when the U.S. Department of Justice said it had completed its investigation of the merger and decided to take no action.
The Justice statement essentially means that the merger, first proposed in February 2007, is not anti-competitive.
The deal still must receive approval from the Federal Communications Commission, which is expected to issue its ruling on the combination in the next few weeks.
There is no guarantee that the FCC will sign off on the merger, but, even if it does, the agency could impose conditions on the union to protect consumers.
In a research report, Miller Tabak media analyst David Joyce wrote that the conditions could include a la carte pricing (which both XM and Sirius said would be available by mid-2008); price freezes for possibly at least three years; allocation of channel capacity to non-commercial educational programming; and third-party receiver manufacturing capability.
FCC chairman Kevin Martin had previously said he hoped the Commission could act on the deal before the end of March, but recently said that was unlikely. However, Martin added that the agency would have a decision before the merger agreement expires in May.
Both XM and Sirius are home to the audio feeds of several cable networks, including CNN, Discovery Networks and The Weather Channel.
The combined XM/Sirius would have more than 17 million subscribers and would be headed by current Sirius CEO Mel Karmazin. XM Satellite chairman Gary Parsons would retain that title with the new entity.
