Merger Watch: Sirius and XM 24 comments
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As widely reported and analyzed since yesterday (7/17), Commissioner Adelstein has issued a proposal to approve the companies' license transfer application contingent of significant concessions involving a six-year price cap on subscriptions, 25% channel capacity divestiture, direct enforcement and interoperable devices carrying traditional AM-FM reception.
Not surprisingly, the conditions proposed by Mr. Adelstein are far beyond what the companies have offered or expressed interest in accepting in order to obtain the FCC consent. This is essentially what this publication has anticipated over the last few weeks with respect to the Commission and the companies working towards a final disposition in this case. Mr. Adelstein's proposal is perceived as both intentionally stringent and subject to revision via negotiation. In other words, this very likely represents the extreme level of conditions from which the companies must now work to negotiate down to an acceptable level.
Of particular interest in this development is that Commissioner Tate may now be the primary focus of the companies, as they will certainly attempt to convince Ms. Tate to vote in favor of the license transfer with fewer conditions. This would be the logical approach now that Commissioner Adelstein has established a "high bar" for Commissioner Tate to consider. It remains extremely difficult to assess Ms. Tate's current position on Mr. Adelstein's proposal or the transaction overall, but it can be generally assumed that this development will motivate her to issue her own proposal shortly.
To repeat the previous analysis of this situation:
"(T)he FCC vote and final decision will occur at some point in the near future and its outcome will very likely fall right in between where the companies and merger opponents hope. In other words, the voting Commissioners are expected to approve the license transfer, but with conditions that will raise concerns for both sides. At the end of the day, the companies will very likely be forced to accept some spectrum and interoperable device conditions associated they wanted to avoid and will alter the original rationale for the merger."
Commissioner Adelstein's proposals must be seen as the catalyst for intensified negotiations and intervention from all parties. It can be assumed that the companies are now in the process of evaluating the proposals and determining the threshold for acceptable conditions. Ultimately, there is a middle ground here, but it will clearly be up to the companies to work towards that middle ground over the next several days, or perhaps weeks.
The perception remains firmly intact that a relatively high chance (+25%) exists that the companies will not agree to the conditions required for FCC consent. However, at this stage the companies now have a solid threshold from which to negotiate and can be expected to work diligently to do so from this point forward.
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This article has 24 comments:
"This will possibly be the final detailed analytical entry for this transaction. "
AND
"It remains a long-shot in the opinion of this publication, with the odds perceived at roughly 20% for the required regulatory approvals and successful completion."
Since saying that, this article marks the 5th time M&A has offered up his analysis.
And today he twists his percentages around to say: "The perception remains firmly intact that a relatively high chance (+25%) exists that the companies will not agree to the conditions required for FCC consent."
Someone get this addict to a methadone clinic.
launiuss.
If I were Mel, I would accept these conditions only if traditional radio converts all of their receivers over so that they can carry sat radio signals and require that they pick up their share of the expenses including the cost of building new receivers as well as picking up some of the royalty expenses and so forth. There is no such thing as a free lunch and the NAB is trying to sell this lemon to the public under the disguise of their concern for the consumer while everyone knows they are looking out for themselves!!!!!
The stock went up 18 cents today because most people know the merger will absolutely happen. When Tate finally ("officially") agrees to the merger with few if any more restrictions than their currently exists, then watch Siri go nuts. I cant wait!!!
As far as Adelstein and the other FCC commissioners go, I hope they are recognized for what they are, and how worthless they have made the FCC as an organization. Now EVERYBODY knows how corrupt and inept this gov't agency is. What a shame!!
GO SIRI !! Go XM!!!
Corruption at is best. What we as Americans should do is NOT vote ANY of the incumbents back into office. NONE OF THEM.
We truly need CHANGE. True, by voting for 100% of NEW people for congressman, senators, etc. we may indeed lose some good ones. BUT the message would be crystal clear. And, given the fact than a majority of these people do not listen to their consituents and vote the way THEY (or the Lobbies) want, we still would come out ahead.
A radical idea but one that at least is worth considering. 100% change. Clean up Washington.
What does everybody think?
In my humble opinion, the moment the DOJ said "no anti-trust concerns", the merger should have voted through. The delays are effectively letting the government (which should be in an oversight role), run the companies down.
just another sad symptom of the incompetence that lives in our government and the inability of the Bush administration to do anything for the right reasons.
Also the same goes for the DOJ. Write president bush and tell him how bad the FCC has been with this. A little more pressure and this merger pops and gets approved with no more concessions.
"WE THE PEOPLE ON THE TAKE OF THE UNITED STATES OF AMERICA"
when does the people get a voice?instead of lobbiest.
When we can outspend the lobbys. Legislation to the highest bidder; the best government money can buy.