The Sirius-XM Merger Battle Drags On
October 12, 2007 at 5:41 AM (PT)
In its push for merger approval, satellite radio provider SIRIUS had 80 attorneys submitting more than six million pages of documents during the three months it prepared its presentation for the Department of Justice, reports CNN MONEY.
"Our photo-copying bill alone was more than $1 million," said SIRIUS CEO MEL KARMAZIN.
In FEBRUARY, SIRIUS announced plans to buy XM Satellite Radio for $4.6 billion in stock. The NAB immediately opposed the deal. Since then, consumer groups, business organizations and others have jumped in on both sides. Four congressional hearings have been held. Regulators are expected to decide by year's end -- and analysts say it remains a 50-50 proposition.
Our photo-copying bill alone was more than $1 million.
"It's been extensively time-consuming, frustrating and painful," KARMAZIN said. "But we're optimistic it will go through."
The DOJ is expected to rule on whether the merger violates antitrust law by year's end. The FCC is expected to rule shortly thereafter as to whether the merger is in the public's interest. Approval is required by both. The NAB is going all-out to scuttle the merger, which it says would create a monopoly.
"Our opposition is based on turning the two companies into one, thus creating a monopoly," said the NAB's DENNIS WHARTON. "Governments recognize monopolies are bad for consumers because it leads to higher prices and less innovation."
But KARMAZIN, a former head of VIACOM, CBS and INFINITY BROADCASTING, says the competitive landscape has shifted markedly. "In 1997, there were no IPODS or cell phones playing audio," he commented. "Internet radio is now booming. You have radio (input) jacks for MP3 players. Bluetooth technology in cars allows your cell phone to broadcast through speakers. Why should the market be concerned about two satellite radio companies combining?"
WHARTON responded, "It's a clever argument on their part,"but the fact is two companies with a national audio entertainment service who are hotly competitive with each other want to turn into one. That's a monopoly."