February 20, 2007
by Mike Anderson and sources

... that would be, of course, the news of the proposed merger of the XM and Sirius SatRad companies, something I never thought would happen. I waited all day for all the reports on this to clear my online resources before commenting.
   Before any merger occurs, there are serious obstacles to overcome: the NAB is certain to object and there are FCC regs that will have to be changed by Congress to allow the deal.
   From inside one of the providers, I hear that possibly as many as a third of the approximately 300 combined channels would either be merged or dropped entirely (there's only so much bandwidth to go around), that users can probably expect commercials to be sold on almost all remaining channels (that was Karmazin's goal from the beginning) and that all existing receivers for both services would be fed the same signal, eliminating the need for subscribers to buy new sets.
   Links: WSJ  XM Press Release  Joint Press Release
   XM shareholders will receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM they own. XM and Sirius shareholders will each own approximately 50% of the combined company.
   Shares of Sirius closed Friday up a dime at $3.70 while XM was up $1, to $13.98; the announcement was craftily made on a federal holiday so there was no trading the "day of". But if you look at the way shares traded last Friday, it's pretty clear that the word went out around lunchtime. Both stocks trended upward sharply from then until closing for the week...it'd be very interesting to see who sold and bought these NASDAQ stocks last week.
   I still believe that SatRad is yesterday's technology wrapped up in new clothes. It, along with HD Radio, will be surpassed by the electronic mist that will engage us all in the next few years, spreading high-speed connection wherever we are and providing whatever we want to listen to or watch into our net-capable devices, whatever they might become.
   Until then, your MP3 player should handle whatever you need. Just be patient.

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