8 Proposed Minority Channels Good For Radio Merger
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While this news is not an approval of the merger as yet, it is very big in that it offers some new insight into the merger process that was previously not available. Respected analyst George Reed-Dellinger, who has been among the most accurate in terms of the regulatory process throughout the merger, published a report Monday citing new information that could not only pave the way for FCC approval, but also ensure that concessions for the merger be more reasonable than people thought.
The big news is that Sirius (SIRI) and XM (XMSR) have pledged 8 channels to be leased to minority owners, and that members of the minority in Congress have praised the idea. This 8 channel arrangement has not previously been publicly discussed. Dellinger points out, and I agree, that this would diffuse the proposals of 20% of the spectrum sought by Georgetown Partners. As usual, Chester Davenport of Georgetown Partners was not available to comment.
REPORT EXCERPT
George Reed-Dellinger — We believe that recent correspondence from Congress has paved the way for the Federal Communications Commission [FCC] to approve the XM -Sirius [deal] in the next few weeks without burdensome conditions. More specifically:
House Commerce Committee Chairman John Dingell (D-MI) asked the Commission to extract restraints on pricing, which the companies have already volunteered, and made no mention of giving back spectrum as a requirement (which the companies oppose). Today’s letter from minority congressmen on the House Telecommunications Subcommittee praised the companies’ pledge to lease eight channels to minority owners. This will help defuse the more aggressive petition by privately owned Georgetown Partners, which asks the FCC to require 20% (sixty channels) for minority programming.
This correspondence from the Democratic Congress lends support to FCC Chairman Kevin Martin in moving the approval forward, without the more burdensome conditions that the Democratic Commissioner’s might be expected to hold out for (spectrum give-back and the Georgetown petition). We have long believed the Chairman was paying only lip service to a goal of gaining a consensus, 5-0 approval of the deal, and would be quite willing to accept (as would the management teams) a 3-2 approval should the Democratic Commissioners oppose the combination. The strongly worded support for the merger by the Department of Justice is likely to have more sway with any court reviewing the case than a Commission vote divided on political grounds. We expect a draft order can now be pieced together and voted on ‘circulation’ as opposed to a May 14th open meeting vote.
Update: While there has been no official comment from Sirius or XM, and while the letter has not yet made the pages of the FCC website, there are indications that the letter will be well received by merger proponents.
The allocation of minority channels has been a topic raised during the merger process. Some cases seemed quite realistic, such as the Public Knowledge proposal of 5% for informational and educational programming, while other proposals such as Georgetown Partners seeking 20% of the spectrum have seemed over the top.
The 8 channels in this proposal could represent 4 channels from each service. Most likely, such programming would be talk radio, and therefore less demanding in terms of bandwidth use. Additionally, at least initially, we could be looking at 4 channels of programming that are identical for each service. In other words, four programs that would be offered to all XM subs and the same four programs available to Sirius subs.
There is no indication that the proposal would take away control of spectrum. That would remain in the merged companies control. Also, there is no indication that non-subscribers would have access to the programming. As it stands, it would appear that the added channels would simply be public service type programming where Sirius and XM have no editorial control.
For those that feel that this is a “shakedown”, consider the alternatives. At least this proposal does not strip away synergies, nor does it impede the company from working with their entire slice of spectrum. In my opinion, a channel concession along these lines was always part of what the company was willing to do. Considering that the company has always utilized the support of Public Knowledge, it goes without saying that some sort of channel concession was in the cards from day one.
Tyler Savery Position - Long Sirius, Long XM
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This article has 80 comments:
Leasing Spectrum is good, more revenue. Releasing Spectrum is bad. By the way minorities are not just Black in America, their Indian, Latino, and vertically challenged like me.
...and by the way.... where are my cable tv choices? Talk about mergers that hurt the consumer. Where is my ala carte programming for tv? It's like everything that the cable lobbies have been fighting against, they are now pushing on this satellite merger. What's good for satellite is great for cable.
The other question I have is what exactly do the people at the FCC do all day? This whole merger is a no brainer. The DOJ decision took forever. Couldn't the FCC have been working on it at the same time? Where is all this work that has been taking all this time. There should be mountains reading material on all of this work that was done. What do they come up with? Pricing, that was already agreed to by the companies. ...and ala cart options, which were also already part of the plan from the companies. ...and now minority options which are already part of the plan.
I don't like to see the govt tell a company that provides a totally optional product and service how to run its business. Both of these companies are struggling and may not make it as it is. Why should the govt get to try to strangle them even more. Just because some huge radio lobby has a couple of politicians in there pockets. These politicians should be brought to task and publicly ridiculed over there involvement and time spent on this non-issue. If people don't like the new Sirius, then they can simply stop paying them and go back to regular radio, HD Radio, cd's, i-pods, mp3 players, digital music jukeboxes, streaming phone music, squeezbox, MySpace, Imeem, Bebo, iTunes, YouTube, ect, ect. These companies are being regulated just fine directly by the consumers.
...and by the way.... where are my cable tv choices? Talk about mergers that hurt the consumer. Where is my ala carte programming for tv? It's like everything that the cable lobbies have been fighting against, they are now pushing on this satellite merger. What's good for satellite is great for cable.
The other question I have is what exactly do the people at the FCC do all day? This whole merger is a no brainer. The DOJ decision took forever. Couldn't the FCC have been working on it at the same time? Where is all this work that has been taking all this time. There should be mountains reading material on all of this work that was done. What do they come up with? Pricing, that was already agreed to by the companies. ...and ala cart options, which were also already part of the plan from the companies. ...and now minority options which are already part of the plan.
I don't like to see the govt tell a company that provides a totally optional product and service how to run its business. Both of these companies are struggling and may not make it as it is. Why should the govt get to try to strangle them even more. Just because some huge radio lobby has a couple of politicians in there pockets. These politicians should be brought to task and publicly ridiculed over there involvment and time spent on this non-issue. If people don't like the new Sirius, then they can simply stop paying them and go back to regular radio, HD Radio, cd's, i-pods, mp3 players, digital music jukeboxes, streaming phone music, squeezbox, MySpace, Imeem, Bebo, iTunes, YouTube, ect, ect. These companies are being regulated just fine directly by the consumers.
THE AL SHARPTON AND JESSE JACKSON CHANNEL MAKES TWO AND THREE. I GUESS IT'S FAIR TO GIVE THEM 5 MORE CHANNELS.
IT'S JUST A MATTER OF WAITING FOR THE FCC TO COME OUT AND APPROVE THE MERGER.
Incidentally, I love the beard. it definitely adds some street cred.
But it looks like you've spent a lot of long nights up analyzing all the data.
Hey, I'm just adding some levity. Let's hope 16888 doesn't get all over my lily white in rushing to your defense again.
Although it did provide some entertainment watching all his mis-spelled posting rants.
You do an excellent job of getting us material Tyler and I really do appreciate what you find and post for us. Keep it coming!
Porcelain
the savery
Tyler please pull his plug..........Thanks and remember I said it $5.00 after FCC ok's merger.
I appreciate you taking one for me yesterday.
What do you think Tyler? Is this just another letter from republican congressman supporting the deal in a democratically held up FCC vote?
porcelain alter, as a matter of fact I did look at it for some time. Here is the reason dimwit. I say dimwit, because only a dimwit would think all the long term deals that both have with the OEMs is going to change much. So you can remain an ignoramus for the next two years, while you wait for these deals to change much. Unlike you, I can do two things at once. This article came out yesterday at 3:32 PM. on Sirius Buzz. The other one concerning OEMs was out some time ago Apr. 2, so I had the time look at it before it came to Seeking Alpha. I'm sorry I didn't know I was in a typing class, but if you would like I can go through your prior post and come back with both Stinkaroo, and your typos or mis-spelled words, here is one right off the bat, its 163888 not 16888 dumbass.
As far as typos go I think I "got" what your trying to "get" so can we please just give it up because I'm "getting" back the headache I just "got" rid of. "Get It"
porcelain alter, I'm retired, so that is a bad thing. I am only 42 so while I do sit and listen to Rush Limbaugh. I am by no means old and feeble. What it does do, is let me do alot of research on investments I have. While I am a big gambler, my wife dosen't like to go to Las Vegas as much as I would Like, and their is were SIRI and XMSR come in.
163888 retired at 42. . .wow... what a country. Now go out and get a job and add some value to society instead of talking about gambling, going to vegas and buying and selling stocks like they were penny candy.
Here's a clue about the numbers you are so bent on studying. Every car manufacturer, bar none, is increasing availability of Sat Rad in more vehicles, across all model years each and every quarter.
Penetration of the technology will approach 100% accross all manufacturers as an option (if not standard) within 3 years.
There are more complimentary devices being created every year as well. All standing by to be introduced across all vehicles and other audio platforms. There are synergies you are not even capable of dreaming about and there is a future for SAT RAD that will dwarf your midget perception of what should really matter right now.
Think small and continue to be small. It wasn't that long ago when XMSR traveled from 4 to 40. There were other major cycles before that also.
Post merger there will be another bullish cycle as well, while you sit there and wonder why. You'll wish you could get it for $5.00 a share and it won't be available.
Keep studying the trees, oh great one, and miss the forest in front of your sad, retired face.
Again, later - as in much.
PA
porcelain alter, When you meet a women like my wife, you will see making a hundred million no longer matters. It is not the measure of a person. The quality of the life you have with her and your kids, is what matters.
What you just said was mostly speculation, I and cos1000 can tell you, there were alot of people that thought back 4 years ago that the OEMs would have already been standard by now, are they NO. I was one of the people that said it would not happen that fast. I am a realistic person who deals with facts not fiction. Do I speculate on stocks, yes. Speculation backed up by facts and not more speculation. Hence, why I feel people are wrong in thinking a stock will be 5 dollars a share just because of a FCC approval. Why, because it did not even come close after the DOJ approved it, Most speculators/investors with common sence would know that if the DOJ approved, that the FCC would do so soon after and why not get in at 3.26 and less to get 5 in a month or two. Logic would be the stock should be at least 3.7 to 4.00 right now, if it was going to get to 5.00.
Its a done deal, I guess?
Mell is the Man!
Who wudda thunk?
LOL
regarding the sirius commercial stating 17 million listeners. This has also happened in the past and was explained by Sirius. They assume a two listener per subscription when talking about listeners.
We would all be better off if we spent our time embracing our similarities: walk upright, love our family, need to make money to survive, deal with taxes, and I think... then we die (circle of life thing). And if we want to consider ourselves to be really advanced and superior we can learn from each others differences, but I warn you.....Its hard work.
wcorowitz, are you kidding me, ugly and fat people have to deal with more prejudging when it comes to jobs then blacks today. If black people want to get ahead and better themselves, heres an idea stop putting each other down for talking intelligently or as blacks say talking white. It is sad when Bill Crosby is put down, and then by the same crowd Jackson and Sharpton are held as heros. It is sad when Micheal Steel Former Lt. Governor is called a uncle Tom, And Condy Rice is called Ancha Mima by blacks. Blacks want to get ahead, stop getting in your own way. Stop watching CNN and try FOX. You want to know why intelligent blacks dont like affirmative action, because they know they made it because they were intelligent, and dont want anyone saying or thinking they only got to were they were because they were given it. Here is a good example: I use to not care when I got to a hospital what nationality the doctor was Because I figured they all had the same kind of schooling and had to have the same kind of grades, now however I see because of U of M affirmative action program Asains are better followed by whites followed by blacks. This is exactly what "thanksgovt" had to say about, equal and Special treatment, you cant have both.