Mr. Karmazin Goes to Washington: Siriusly You Guys, Let Us Merge! We'll Do Anything

Illustration for article titled Mr. Karmazin Goes to Washington: Siriusly You Guys, Let Us Merge! Well Do emAnything/em

Mel Karmazin, Sirius's head honcho, wants that merger baaaad. He took to Capitol Hill this week to try to give the merger-to-be a running start toward clearing the significant regulatory hurdles (and doubts) it's likely to face in the coming months. Talking to the antitrust taskforce on the House Judiciary Committee, he revealed that they're "prepared to make concessions, and we're willing to work with the FCC on doing it."

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What kind of concessions? How about the one everybody wants to hear: price controls. Yep. He added that they'll "leave it to the regulators" to enforce promises they're making about "more programming and better services at lower prices." Whether or not you trust the regulators is another story though, I suppose.

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Also combatting suggestions that the new company would be a monopoly, Karmazin repeatedly emphasized that within the context of the broader market—traditional radio, internet radio and mp3 players—they are not.

There is, I feel, some weight to his argument, as much like it sounds like hot air. I have an iPod—I don't think about satellite radio, though I might if I didn't. There's enough competitive pressure coming in from all sides, it seems, to drive them to keep things balanced, lest subscribers flock elsewhere. Whether or not Congress and the FCC buys that argument remains to be seen.

Sirius Chief Talks of Ways to Get XM Deal Approved [NYT]

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DISCUSSION

The first question is... "why" does he want this so bad?

Forget about regulatory hurdles, the Sirius stock values are depressed because they cannot make money with their current model... XM is not that far behind, but seems to be more frugle with the money being thrown at talent or content. In the end, both companies original models projected profitability at 10mm subs.

That model was thrown out the window when SatRad started competing for "talent" like Howard.

The question then becomes, can one company be viable with 14-18mm subs? Mel knows that one of the two companies will crumble under the weight of the costs associated to their bloated contracts, and Sirius is closer to this scenario than XM is.

Protect the stock holders at all costs... forget about the services and customers, a monopoly protects the revenue stream.

Yea, I'm a little pissed about the merger.