This is quite a big story. It is, really. That's why it's here at the top. Might mean nothing to us here in the UK, where satellite radio is yet to be unleashed, but it could have quite an impact on the American music media space in the years to come.
Anyway, the US's two rival satellite radio networks, Sirius and XM, yesterday announced their intent to merge. The two companies are proposing a tax-free, all-stock merger which will see the collected shareholders of each organisation controlling about 50% of the new merged firm. XM Chairman Gary Parsons would head the board of the new company, while Sirius CEO Mel Karmazin would run it on a day to day basis. Current XM CEO Hugh Panero will continue to run that company until the merger is closed.
Of course, it is not a completely forgone conclusion that the merger will, in fact, ever be completed because the deal will need the approval of the US government and, as rumours of a Sirius XM merger have circulated in recent weeks, Kevin Martin, the chief of the country's media regulator, the FCC, has repeatedly stressed that such a merger could not happen, because both companies' licence conditions forbid it. The merger will most likely need to find support in US Congress and, while the satellite firms will have a proactive lobbying strategy in place, they will have to out-lobby the powerful National Association of Broadcasters, which represents XM and Sirius' terrestrial rivals, who have no interest in there being one powerful satellite broadcaster focused on competing with them rather than each other.
Nevertheless, the satellite radio companies' chiefs yesterday spoke of the merger as if it was a definite. From XM's side, Parsons and Panero issued a joint statement, reading thus: "We are excited for the many opportunities that an XM and Sirius combination will provide consumers. The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission first granted our satellite radio licenses a decade ago".
From the Sirius side, Karmazin told reporters: "This combination is the next logical step in the evolution of audio entertainment. Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders".