Monday, March 24, 2008

XM-Sirius Merger Finally Approved By Justice Department. Now What?

The FCC Still Has To Sign Off On Deal, Though. Let The Lobbying Begin

Consumer groups and the National Association of Broadcasters took a bruising today, after the merger-happy Bush Justice Department gave its blessing to Sirius taking over XM to create satellite radio hegemony.
Or so we're led to believe.
Now it's the FCC's turn. No clear indication, based on previous FCC rumblings, that this is a fait accompli. But it's probably more of a done deal than not, especially if the commission's deliberations and likely court challenges are swept aside before Jan. 20, 2009.
After that, all bets may be off, especially if a Democrat starts redecorating 1600 Pennsylvania Ave.
Either way, if this drags on too long, the ultimate loser will be the millions of sat radio listeners. The more both companies have to remain independent entitites, the more debt piles up. More debt will mean more cutbacks eventually.
You can already gird for redundant channels being combined. That's a given. Two channels devoted to classic alternative rock or progressive country just won't be needed when there's only one roof to broadcast under.
The larger issue is whether the new Sirius will skimp on what's left -- doing just enough of what it needs to do to retain listeners while it still bleeds red ink, rather than continue to innovate. Sirius big cheese Mel Karmazin is saying all the right things -- now. But Mel's all about the money, and while he recognizes the value of good talent (see Howard Stern), that may only take him so far if the banks start breathing heavier around Sirius HQ.
Stay tuned.

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