Politics Heat Up Sirius-XM Merger

From the very beginning, the proposed merger of Sirius (SIRI) and XM (XMSR) faced major political hurdles. Almost instantly after the announcement, Mel Karmazin and Gary Parsons found themselves speaking before multiple political committees.

Through most of the merger process, the political presence has been limited to letters both for and against the merger. Now, today, Congressmen Conyers and Chabot have inserted themselves into the merger yet again.

The first occasion came early on in the merger process when both of these congressmen got press because they notified the National Association of Broadcasters that the organization misrepresented them as being against the merger. Now, the same two legislators, while still maintaining that they have no position on the merger, have expressed concern that the Department of Justice may be acting to quickly, and that the agency should be sure to follow all procedures.

Before merger fans fully tar and feather the congressmen, they are doing their job. However, the desire for them to once again insert themselves into a process for which they have no real authority is curious. Many will assume that these two are “bought and paid for” by some anti-merger organization. Such an assertion could never really be proven, but it would be fair to see what types of related contributions that these men have accepted. Thanks to OpenSecrets.org, we the people have access to contribution information.

Congressman Chabot (R-Ohio) Contributions

March 27, 2007 - $1,000 from the National Association of Broadcasters
September 24, 2007 - $1,000 from the National Association of Broadcasters

Congressman Conyers (D-Missouri) Contributions

May 29, 2007 - $2,000 from Broadcast Music
June 13, 2007 - $2,500 from Clear Channel
April 30, 2007 - $2,000 from National Music Publishers Assn

This is not to say that these men have been bought and paid for. The funds they have received are pretty typical in any given year. Likely, the value of the press that these congressmen received for their stance, or lack of a stance, on the merger has far outweighed the value of any contributions they may have received.

What investors need to be cognizant of is that congress has little authority on the merger process, and no formal voting rights in the matter. They can try to exercise their influence, but they do not control the outcome. The political pressures in Washington can be extreme at times. The FCC has come under a bit of fire, and now the DOJ had their turn. We will never see it published, but I would imagine that Attorney General Mukasey fired off a response that said something like, “Thanks for your concern gentlemen, but we have things under control”

Full Disclosure: Position - Long Sirius, Long XM

Comments

[jcee]

Gentlemen of the DOJ, FCC,etal; Please do something or get off the pot. I would like to buy a new car but would like to take advantage of
the talked about ala carte plan. Whatever the holdup in approving or
denying the merger has put me on hold as what to purchase. I would like both NFL and Major league baseball if possible.