FCC: No XM / Sirius Merger

[Rosco T.]

http://www.thestreet.com/_yahoo/newsanalysis/techgames/10333065.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Sirius, XM Can't Merge: FCC Chief

By TSC Staff
1/17/2007 3:17 PM EST


Shares of Sirius Satellite Radio (SIRI - commentary - Cramer's Take) and rival XM (XMSR - commentary - Cramer's Take) tumbled Wednesday after the chairman of the Federal Communications Commission said agency rules wouldn't allow the two to merge.

A potential merger of the companies has been the subject of repeated speculation in recent months, but Bloomberg quoted FCC Chairman Kevin Martin as saying that existing regulations prohibit a single owner for the two satellite-ratio operators.

Martin made the comments following an FCC meeting. Sirius was dropping 5.5% to $3.92. XM was slumping 7.6% to $15.83.

-----------------

We can now put this to rest and begin the deathwatch for Sirius (XM *made* money last quarter, Sirius is still losing it)

[Nickster]

1. Why do you think Sirius is going to tank? They have been making up the difference in subscribers

pretty quickly lately and it seems that they are selling far more radios.

[onehandle]

2. Sirius started making money last quarter.

They are growing at a much faster rate than XM.

Yes, because of Stern.

[Rosco T.]

4. You need to check your sources...

and the 'Stern' effect is over.

[Nickster]

5. They are growing their revenue, but they aren't turning a profit yet. They are in the hole because

of the stock options they have to pay out to Stern and crew.

[Rosco T.]

7. exactly...

$100 million a year for Howard is quite a chunk

[Nickster]

8. Yeah, but XM isn't making up their losses as quickly as Sirius is. XM is dumping money for

content just like Sirius. I'm just curious why you think one will survive while the other won't. It seems like Sirius has the momentum at least currently.

[Rosco T.]

12. sorry,

XM is not puttin out NEAR the money that Sirius is. They are spending it WISELY and CAREFULLY.

a simple look at the stock prices says it all.

[Nickster]

16. Sure their burn rate is higher right now, but they'll be forced to start bidding up soon. Just watch

Sirius is being bold about it and so far, they seem to be right. Doesn't mean it will last, but if they corner the talent and can sustain a high burn rate for longer than XM can, then it would be lights out for XM. It's the content that drives subscribers.

[onehandle]

11. They achieved "positive cash flow" and outsold XM in the 4th quarter.

They may not be "profitable", but Stern saved them. For now.

Will they survive? Maybe, maybe not. But they have a much better chance in their current position.

[Nickster]

18. Positive cash flow means nothing. It just means they had more cash coming in for a particular time

period. Profitability is the defining issue for a strong company. Having a postive cash flow and negative profitability is a bad thing long term.

[onehandle]

21. Really?

I thought leprechauns were the defining issue for a strong company.

Silly me.

[Nickster]

23. You're the one saying that postive cash flow meant something. n/t

[onehandle]

26. It's a start.

I also said they may or may not survive.

I stand by that statement 100%. ;-)


Look, I'm just goofing around. Someone else in this thread seems a bit single minded for some reason.

[musette_sf]

3. idiotic

so the multi-tentacled beast Clear Channel can own as many outlets as they want in a single given marketplace...

but Sirius and XM, who serve no given marketplace (unless the entire Continental US is a "given marketplace"), can't merge?

this is bull-whack-doody of the nth degree.

Clear Channel really hates competition. A Sirius/XM merger would make the resulting company and product far more attractive than it is currently. ppl would be turning off commercial radio in droves, were the equipment no longer proprietary and the price a tad more affordable.

[Selatius]

6. It's likely due to the fact that if they merged, they'd break anti-trust laws.

As far as satellite radio goes, who else besides XM and Sirius is out there?

[Nickster]

10. But you can get radio programming from any number of sources. They don't count

the cable companies as a monoply because you can get sat tv. What's the difference with radio, you can turn on the FM radio, or turn on the Sat radio, or stream the internet, etc,etc.

[drbtg1]

33. It's consistant for them

Prior to this, BushCo's FCC ruled DirecTV and Charlie Ergen's DISH Network couldn't merge either for the same reason, even though they have competition from cable and (soon) the telco's as well as another government agency said a DirecTV-DISH merger would be a good thing.

Of course, it didn't help that Ergen hired one of Gore's Florida 2000 lawyers for this. Plus, since Murdoch eventually bought DirecTV, he may have made his want list known to the powers that be during Ergen's attempt.

[joeunderdog]

29. They want Satellite to fial. They can't control their message.

Clear channel/Bain Capital/Mitt Romney Co owns the rest of he planet, and they are under the RW umbrella. XM and Sirius are weaker separately.

[soothsayer]

30. xm and sirius provide unique content---I can't get xm shows on my

sirius for the most part, and vice versa, so I really don't think it's anything like an antitrust case. Now if they let the content merge (say you could get Howard Stern on both), then it's just a matter of which provider you want to use. Eh, we'll see where this goes.

[Marnieworld]

9. Au Contraire

In 2005 when Howard Stern signed with Sirius they had 150,00 subscribers. When he joined them in January 2006 they had 600,000. At his first anniversary they had 6 million subscribers. Deathwatch my ass. Profits smofits. They are investing in technology, launching new satelites. Just as Amazon started with no profits because of investing in itself and yet still exists today, so will Sirius. Anyone I ever introduce to it is amazed by it. Once you have any satelite radio you never ever want to listen to FM again. Never.

[Rosco T.]

13. ahem

Sirius $3.92
XM $15.83

nuff said

[Marnieworld]

17. Stock price isn't the only way to determine success

I dunno Rosco you seem pretty insistent about this. Almost as if you have a horse in the race. Are you saying only XM will survive or are you saying that all of satelite radio won't succeed?

[Nickster]

20. Stock price is only one indicator of a company's overall financial health.

You can't just look at two stock prices and make a sound decision on a company.

[Redbear]

28. But, Sirius has about 6.5 x more outstanding shares than XM

The overall Wall Street analysis is fairly bullish on both companies mainly due to the popularity of satellite radios as an option in new autos.

[onehandle]

31. As a total, Sirius is valued at 5 Billion, XM at 2 Billion.

Both have huge contracts with manufacturers.

They'll both be around for a while.


After all, Apple will go under any minute now. Critics have been saying so for over 20 years.

[nolabels]

34. Does that mean I should throw my daughters iPod away?

EARNINGS
Apple profit jumps 77%

From Tribune news services
Published January 18, 2007

Apple Inc. said Wednesday that first-quarter profit jumped 77 percent after holiday shoppers snapped up iPods in record numbers and Macintosh computers.

The Cupertino, Calif.-based company posted net income of $1 billion, or $1.14 a share, from $565 million, or 65 cents a share. The most recent result easily beat estimates of 78 cents a share. Sales surged 24 percent, to $7.12 billion.
(snip)
http://www.chicagotribune.com/business/chi-0701180085jan18,0,1372522.story?coll=chi-business-hed

[onehandle]

35. Yeah, Apple is history.

1 Billion dollar profit. Chump change!

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=2693519&mesg_id=2693519

[onehandle]

15. Yep. My wife and I own both systems.

No one in their right mind would go back to commercial filled radio.

I wish they could merge, but it was always unlikely. And technically impossible without a new satellite system launched.

[RB TexLa]

14. The FCC has jurisdiction?

[Marnieworld]

19. I was wondering that myself

Is it more about monopolies and isn't not within their control becaue it's satelite?

[Nickster]

22. They regulate the transmission method(s) but not the content.

The way I understand it, they can regulate content when a station is licensed by them and sat radio isn't licensed by them.

[Marnieworld]

24. You sure know lots of stuff Nickster

:hi:

[Nickster]

25. None of it really important though. LoL ;-) I'm just a radio geek. Not like Rosco is though!

:hi:

[RB TexLa]

27. Thanks

[bullwinkle428]

32. Sirius and XM both "growing but unprofitable" according to Fool.com

Interesting article on the subject. I don't have a dog in the fight...just trying to learn more about their financial situations.

http://www.fool.com/investing/high-growth/2007/01/10/howard-sterns-stock-stuffer.aspx