Satellite Radio Merger Talks

By: Venton Blandin Email
By: Venton Blandin Email

February 20, 2007

The radio industry is making waves with news of a proposed merger between two satellite radio companies.

Those who work in the radio industry said the proposed merger of Sirius and XM Radio is interesting because of the timing.

One radio vice-president said this is not the first-time a merger of this type was brought up, and the last time it was the idea was squashed.

Executives with XM Radio and Sirius Radio said there will be plenty of competition if their proposed merger is allowed to proceed. When the idea was first floated around, the Federal Communications Commission Chairman, mentioned he felt it was in the public's best interest to have two different companies operating to maintain a competitive market place.

The Wall Street Journal reported Sirius sales falling 40% and XM sales falling 55% during the holidays in 2006.

The Vice President of the Charlottesville Radio Group believes that could be the reason for both companies wanting to merge.

"The feeling here, right now is, that this is something being done for the investors, for attorneys, and for those running the company to make money. It is not being done for the benefit of the consumer," said Charlottesville Radio Group Vice President Dennis Mockler.

The main hurdle in keeping the merger from happening is neither Sirius nor XM radio have gotten the approval from the FCC. The commission must decide if the merger is in the public's interest.

FCC Chairman Kevin Martin admits the hurdle to get the merger approved will be high noting the rule prohibiting one company from holding both satellite radio licenses.

The National Association of Broadcasters is urging federal regulators to block the satellite radio merger.

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