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Merger losing momentum?
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| Merger losing momentum?
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| AustinGos |
http://www.orbitcast.com/archives/s...-as-fading.html
The proposed merger between Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSRS) may have lost momentum in receiving its necessary regulatory approval, according Bank of America analyst Jonathan Jacoby.
The problem, according to Bank of America's D.C. contacts, lies in Sirius-XM's joint reply comments on changing the "rule" that prevents either satellite radio provider from merging (also known as the regulatory "Achillies heel"). Jacoby wrote in the client note that the D.C. contacts felt Sirius and XM's joint arguments "were somewhat weak," while the NAB's comments argued the merger could "set a precedent that would encourage a wave of media consolidation."
Sirius and XM filed their reply comments for the Notice of Proposed Rulemaking (NPRM) to the FCC late last week. You can read the filing here (PDF).
Bank of America's contacts in D.C. saw Sirius/XM's filing as simply a request to repeal the decade-old rule, and "lacked the substance" that the Federal Communications Commission likely would require.
Meanwhile, the NAB's filing told a different story. They argued that if satellite radio is considered part of a great audio entertainment market, then this would set a precedent, and the FCC should abolish media ownership restrictions as well. If the FCC simply waives the rule, they risk losing - again - on ownership issues at the courts.
You can read the NAB's filing here (PDF).
The potential precedent this merger would set - for both the FCC and the DOJ - could very well be the biggest obstacle for Sirius and XM in trying to get this deal to pass. It's also by far the NAB's best argument yet (and a break away from the consistent "merger to monopoly" line), but playing this card also puts their goals for further media consolidation at risk. |
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