Georgetown Partners' Latest Radio Proposal Raises Many Questions 48 comments
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Months ago, when Georgetown Partners began their quest for 20% of the SDARS spectrum, I composed a list of questions that I felt should be answered. Among those questions was whether Georgetown was looking to build their own satellite radio company, or merely going to act as an “auctioneer” of channels to terrestrial radio broadcasters.
What I noted then was that Davenport lacked radio experience. I found it odd that someone would seek 20% of the SDARS spectrum (about 60 channels), and not have a plan as to how to fill that spectrum with content. I alleged at that time that perhaps the plan was to grab the channels, and then go to terrestrial radio giants like Clear Channel (CCU), CBS (CBS), etc. and offer them blocks of channels that would be available in every market.
I also found it odd that the National Association of Broadcasters and terrestrial radio stations were dead silent on this issue, despite the fact that Georgetown was having meetings with the FCC at breakneck pace. Had Sirius (SIRI) or XM (XMSR) proposed 60 channels of free commercial supported radio, the NAB and terrestrial radio giants would have filed complaint after complaint with the FCC. Somehow, though, the proposals of Georgetown Partners got no response at all from terrestrial radio.
Now, in the eleventh hour, Georgetown’s Chester Davenport has announced that he is prepared to partner with Entravision (EVC) to help fill all of the channels he is seeking. Entravision is a Spanish language-based media company with 48 terrestrial radio stations, 41 of which are located in the top 50 Spanish markets in the United States.
Perhaps the most interesting item to note is that Entravision is NOT minority owned. It is a publicly traded company just like Sirius and XM. Entravision is traded on the NYSE under symbol EVC. Literally, from an ownership standpoint, the shareholders represent the owners of the company. Entravision simply has a business model that is based on minority programming. The fact of the matter is that “minority ownership” of Entravision may be more or less than Sirius and/or XM. It all boils down to the demographics of the investors. The fact of the matter is that there is nothing stopping Sirius and XM from offering diverse programming….. In fact, they already do.
It would appear that what we have here is a minority businessman, Chester Davenport, who simply wants to act as a middleman. Being a minority would give him certain competitive edges in obtaining the rights to spectrum, but in reality, the operations of the business may well have nothing at all to do with Georgetown Partners if they are simply a “paper owner”.
For clarity, I have nothing at all against having minority programming. Entravision delivers quality content, and it would be wonderful to see their business expand. The question is why Mr. Davenport is even needed in this situation. Is it simply to “qualify” as a minority owner? What is more important - the ownership, or the content delivered to consumers?
Davenport argues that the seizure of 20% of the spectrum would only impact 2% of the subscribers of Sirius or XM. He supports this by stating that subscribers only “listen to” a finite set of channels on SDARS. That argument falls flat because one of the compelling aspects of SDARS subscribers is the ability to have a wide variety of content. Stripping 60 channels out of the SDARS line-up is not a 2% impact. See what happens with SDARS subscribers if 60 channels suddenly fell from the line-up. Do you think customers would complain? You bet they would.
Further, the primary products of Entravision are three channels. They broadcast through a centralized production facility and their leading products are music formats:
- Super Estrella, a music-driven, pop and alternative Spanish rock format.
- Radio Tricolor, a personality-driven, Mexican country-style format.
- Jose, a mix of Spanish-language adult contemporary hits from the 1970’s to the present.
This would use 3, and maybe as much as 6, of the proposed 60 channels. What has Davenport promised for the rest? To quote from his own filings, “Family friendly commercial supported programming that meets FCC decency standards”. News flash……When Howard Stern was on the terrestrial air waves, his programming was “family friendly programming that met FCC decency standards.”
For Georgetown Partners, bringing out Entravision could well be an attempt to state that the 20% would be African American as well as Hispanic based. I do not buy it. Not for a second. If Davenport ever wanted to make money on a national basis, he would need mainstream programming. Whether rap, country, rock, or talk, the breadwinner type programming needs to be a part of the mix. In my opinion, Georgetown Partners is simply hiding this bit of information.
What value would having KISS FM on in every market carry for a terrestrial radio giant? Think about the most popular formats being available on terrestrial, HD, as well as satellite all under the control of a Clear Channel or a CBS? Program the show and broadcast it in every medium. Don’t forget Internet radio. All of the big boys also broadcast globally on the net.
Chester Davenport is a smart man. He was smart enough to ask for and receive meetings. He was smart enough to bring in consultants with relationships to Martin. He is smart enough to play the minority ownership card in such a way that limits other minority competition. He was smart enough to keep his plans veiled. He was smart enough to not answer the questions raised by Sirius Buzz, and he was smart enough to avoid daily calls from this writer for weeks on end. Did we see something that Davenport did not want us to see?
Davenport will not get what he wants. What he is seeking is a merger deal-breaker. While his efforts have been less than transparent, a bit of reading between the lines will get anyone to the motives behind the Georgetown Partners proposal.
I am not against minority programming or ownership. From a consumer perspective, all I care about is what programming is delivered, and whether programming exists on the service that meets my taste. From an investor perspective, the same is true. I do not care whether SIRI, XM, or EVC are invested in by any race. It simply does not matter. What I am against is a spectrum grab under the flag of “minority” when we have not been ensured that such ownership would center their business around that concept.
Simply stated, the Georgetown Partners latest proposal raises more questions than ever before, and perhaps sheds a bit of light on what exactly is being put on the table.
Georgetown Partners FCC Filing
Position - Long Sirius, Long XM, No Position Clear Channel, CBS or Entravision
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This article has 48 comments:
Consumers want this merger. Has there ever been a merger so overwhelmingly endorsed by the consumers of a product??
Keep calling/writing the FCC and your congressmen.
You all should be embarrassed, and fired! You have lied and stalled enough. 180 day clock =a scam, by the end of the year=a Lie, by the end of the first quarter=another Lie, Shortly after the DOJ decision=another lie, Martin says he was having multiple drafts written months ago=lie. Now shortly and pretty shortly; but no drafts circulated in over a year and a half! Now By the second quarter again nothing…..What have they done in all that time????? DOJ has proven this is not a monopoly! Allow the licenses to be combined and stop pandering to every group out there! They have no right trying to get my Company for free, I paid for shares of my company and you have no right to give anybody anything that I own. If the minorities want more radio exposure let them go buy a radio station with their own money. This is a free country, not a socialist state. So allow the combo with no concessions other than what the companies agreed to begin with. I hope you are all investigated for this disgrace, you are going far beyond what the FCC was intended for and now you are using this unassigned power to destroy American confidence in our government, and any company you choose to destroy. Your stalling of this decision has cost me personally and many more I am sure, I hope the companies file suit for your stall tactics, the empire state building was built in less time. And both companies have now lost the Millions/ Billions due to your indecision. You have no right to cost companies so much. This is America, free market capitalism, remember? This is not a necessity it is a pay luxury service. Mr. Martin do you have a Boss that oversees you, or are you a free-bird with no one to answer to? I would like to speak to your boss because no common sense decision can take over a year to make. I don’t know of any company, employee, or anybody that can take so long to do a job and still have a job after showing this amount of incompetence. I want you and you group all fired. Here is a link to a video that shows how irrelevant you group is; www.youtube.com/watch?...
So in ending you appear to be protecting your buddies at the NAB, and pandering to any special interest group wanting something for free. How about the Americans you supposed to be protecting? By the length of time you have been taking means one thing to this American and that is you are saying FU to ME. And I want you Fired. I will be sending this to anyone that will read it, the sad thing about that is that unless it is accompanied with a check, I assume no government official will read it.
Signed; One disappointed American.
Top ten FCC acronyms:
10) Funded by Covert Contributions
9) Forgetting Congress’s Constituents
8) Forever Changing Competition
7) Fighting Competitive Corporations
6) Functioning Contrary to Consensus
5) Forcing Conditional Control
4) Forgetting (Time)Clock Covenants
3) Forever Counting Contributions
2) Functional Contributions Center
1) Funded by Clear Channel
Money, so they say, is the root of all evil today
- Pink Floyd
I apologize for not sticking to the merger topic, but I am so mad and frustrated that the only agenda that could put this to bed would be a rally or extremely large town meeting, so that we could show everyone in our country how ludicrous these proceedings have been.
I being a stockholder am bitter and extremely pissed off to think that someone as the right to give part of my wealth away to feed another self interest when they don't even have a prior financial stake in the venture.
I do not recommend buys or sells. Plain and simple
disappointed American, Why dont you get off it also moron. I take it you are talking about Martin and it is out of his hands at this point, he has already given his approval. So why dont you point your venom where it should be pointed at the two democrats on the board. My god how dumb are you people. You dont Bitccch and moan about the people that will vote for it. You bitcch and moan to the people that have and are still against it.
Tyler you are awesome. Those who comprehend what you write love you. Those who complain, do not truly comprehend what they are reading. They read into it what they want.
You are so bent on casting aspersions that you have opened yourself up to the following criticism:
I have stated time and time again that I am not a "self appointed satellite radio expert" yet for some reason you love to give me that title. I have made it crystal clear, and stated it explicitly, I AM NOT THE EXPERT ON SATELLITE RADIO, yet somehow you still do not comprehend this. Perhaps reading comprehension is the source of some of your problems.
You are seeing something that is not there, and even when you are told point blank that it is not there, you still see it.
I do not know how much more simple this concept can be. I do not recommend buys or sells. Nowhere in my writings will you find me making such recommendations.
GJel.....
I have actually been quite neutral on these stocks for quite some time. I am bullish on SDARS as a concept and a product, but that differs from the equities.
Interestingly, someone sent me this site ( labs.daylife.com/journ... )that seems to pick up my stories and this site categorizes me as "mostly neutral" as you can see on the right hand side. I have no idea how they come to their determination, but I thought it interesting.
Just another reason to stop paying your taxes. They just go to morons like the FCC.
FED UP AMERICA
Food for thought.
What you are not comprehending is that the "Long SIRI, Long XM" is a statement that I have a position in the equities. It is not a recommendation. I have had a long position in these companies since the recap of SIRI.
Someone who bought at $1.00 and someone who bought at $3.00 can both be LONG. However, their sell points or sentiment could differ dramatically.
LONG is a statement that I have shares in the equity. Nothing more, nothing less. This has been made quite clear some time ago for any of those that did not understand the differences between a statement of position and a recommendation.
A recommendation would be BUY, SELL, HOLD, etc.
The name calling accomplishes very little and does not add to the value of the conversation.
The FCC could care less.
Bottom line: The price of a stock when you are considering buying it IS important. Buying too high will hurt you just as much as selling too low. And further, when evaluating the merits of a stock you currently hold, the price that you bought it is IRRELEVANT (except for tax considerations). Either you believe the stock has a high probability of appreciation (and a good risk/reward ratio) or you don't...the price you paid for that stock has NO BEARING on that analysis.
Sorry to be negative, but I think accepting these facts will help you in the long run.
Now...let's get back to waiting on the FCC...I'm sure the vote will come any minute now....yeah right.
This has imo been a shakedown of Siri and XM , their customers and stockholders ---- In this shakedown, there are no physical weapons, they just use the government and courts---it's like an ongoing filibuster in Congress with no end in sight.
It's like the child who cries and cries until you acquiesce and give them what they demand.
Do a little corporate research into similar shake downs---Toyota being one of the more notable.
The FCC needs to tell Georgetown and their buddies to take a walk.
Tyler, have you ever consider sending a link to Seeking Alpha to the FCC----I am not convinced they even begin to understand what the real people who are investors and subscribers to Siri/Xm think about this merger.
20,000,000 subscribers to XM and Siri combined---impressive.