XM, Sirius Draw Merger Lines 90 comments
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You have to read between the lines to see it, but it seems even more clear now than it ever has. Sirius (SIRI) and XM (XMSR) are not going to give up spectrum to facilitate the merger. Mel Karmazin and David Frear both stated in strong terms that they are not going to do anything that is not in the best interest of shareholders and subscribers, and that they would walk away from the deal if it came to that. Giving back spectrum would harm both shareholders as well as existing subscribers.
Consider that Sirius and XM have promised that existing radios would work, and that existing subscribers would still have access to the quantity and quality of programming that exists today. If Primospere were to get 30% of the spectrum, how could Sirius and XM keep their promise? The same is the case for the Georgetown Partners proposal seeking 20%. In either situation, both subscribers and shareholders absorb the pain.
Simply stated, the Primosphere plan is a deal breaker. So is the Georgetown Partners plan or any plan seeking a swath of the current spectrum. They are all deal breakers.
Sirius and XM have committed to 4 channels each (a total of 8 channels). Perhaps that will become 10 channels total, but they are not giving up spectrum to accomplish this. Public Knowledge has sought several conditions in the merger process, and much of what they are seeking can be accomplished if the merger is allowed to proceed without further cannibalization. However, if Primosphere or Georgetown were to get their way, none of this can be accomplished. Georgetown recently committed to Public Knowledge and Media Access Project that they would facilitate the goals of each IF Georgetown got their 20% AND these groups got what they were seeking. This will never happen, and hopefully Public Knowledge and Media Access Project are aware of this. The Georgetown proposal is a deal breaker.
The FCC now needs to consider whether they want something or nothing. If the FCC wants A-La-Carte, Interoperable Radios, some Public Interest A programming, and Open Access, it will only happen with a merger. If the FCC steps into the realm of stripping away spectrum, they will squash the deal and then none of the consumer benefits will come to fruition.
Simply stated, the merger and all of the benefits will not happen if spectrum loss is part of the equation. The FCC, Public Knowledge, and others need to weigh the benefits that can be brought vs. the thought of having the merger fall apart, and a status quo situation (Sirius and XM with exclusive OEM deals, exclusive content, no interoperability, and no A-La-Carte) for current subscribers as well as future subscribers. There are 17 million existing subscribers that have a certain level of service right now. To disrupt that service or take away from it is something that the FCC should weigh carefully. Many existing subscribers are the very people that have committed to and are fans of satellite radio. To take away from these subscribers would be a disservice to them.
Georgetown’s Proposal - Deal Breaker
Primosphere Proposal - Deal Breaker
Public Knowledge Proposal - Workable
Media Access Proposal - Workable
At this point the cards are on the table. If this was not clear to people earlier it should be now.
Position - Long Sirius - Long XM
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Sirius Fan, look at my post above on SIRI to killerkaul at 5/19, 1:32 PM. "No news" is all it takes for both of these stocks to float down, although todays volume was pretty normal, watch out if the volume drops off, they'll trade lower still.
163888...Science aside, oil prices at these levels is more of a trigger than the science... All the talk about approaching "Grid Parity" with coal and gas and new money anticipated from the inevitable Democratic President with a democratic congress is a pretty good stimulus for these stocks and their "GREEN" too. The new democratic congress is going to remove oil subsidies and feed these fledgling green companies whether they pan out or not. There won' be a President elected who would dare to veto that bill. Even McCain, especially if we have $4/gal going into Winter. If oil prices tank so won't these companies, but that's about all that going to stop them in the short term, (now 'til the end of the year)
I was unsuccessful with the toll free number.
Certainly as I have posted before on Tyler's site-----spectrum that Siri and XM own should not be given away to Georgetown Partners or to any other entity that want's a piece of the business they did not build.
It is a shame, a real shame, that a few Congressmen and a few Attorney Generals aligned with the Democrat Party made an attempt to block this merger approved by the DOJ by lobbying the two Democrat members of the FCC------a real shame that we are being denied this world-class
system.
I was so very proud that Sirius-Satellite broadcast the Nascar, the NFL, the Pope's visit, the Frank Sinatra Special and so much more.
Also my convictions will only go so far, so if DRYS gets down to 98 I will buy back 200 shares. I hold that veiw until July then I would wait til Jan. or 60 something to buy back.
For all those democrats out there, that want this merger to go through, and think it is the republicans holding this up or think this would have gone better if a democrat got into office instead of Bush. Read the Reuters atricle, "US Antitrust lawers say Obama maybe optimisic". It shows just which ideology is the one that is for mergers in general. I will tell you this much now, IT IS NOT THE DEMOCRAT IDEOLOGY.