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XM and Sirius Proposed Merger

Doyle, Barlow & Mazard PLLC

Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. are the only two corporations authorized by the Commission to provide satellite radio service in the United States. On March 20, 2007 they submitted an application to the FCC requesting permission to combine into a single entity. Each entity would own half of the company, and the equity ownership would be divided evenly between the shareholders of both corporations.
The National Association of Broadcasters is just one of many political forces urging policymakers to reject the deal calling it an “anti-consumer proposal”. The trade group also stated that “given the government’s history of opposing monopolies in all forms, NAB would be shocked if federal regulators permitted a merger of XM and Sirius.” The numerous groups that are strongly opposed to the merger fear that if approved it would only hurt the consumer.

On the other hand analyst Robert Peck of Bear Stearns is forecasting that the merger will be approved. According to Radio Ink, Peck wrote that XM/Sirius possesses many arguments as to the benefits it will have to society. Peck also stated that the FCC is likely to approve the merger if they pay close attention to the merits of the deal.

On July 9, CNN affirmed that shares of both XM and Sirius decreased more than 20% since news of the merger was announced back in February. The FCC is currently looking at the rules of media ownership, and has not currently made a ruling.

Authored by

Camelia C. Mazard
202-589-1837
cmazard@dbmlawgroup.com

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