There’s been speculation about this for months, and now it’s just one legal hurdle away: XM and Sirius announced today their intention to merge into one colossal entity, billed as a “merger of equals.” Via Reuters:
Under the terms of the deal, XM stockholders will get 4.6 shares in Sirius for each XM share held. The merger would create a company with an enterprise value of $13 billion, including $1.6 billion in net debt.
Veteran media executive Mel Karmazin, currently Sirius CEO, will be CEO of the combined company, and Gary Parsons, now chairman of XM, will hold the same position in the new company. It said Hugh Panero, XM CEO, will continue in his current role until the merger closes.
The FCC still needs to give the deal its blessing; at present, satellite licenses prohibit one entity from having a monopoly by owning ‘em all, but FCC Chairman Martin has gone on record, saying that rule is “open to change.” Now all of you lucky satelliters can get your fix of Oprah, Howard, MLB, and NFL all in the same place for the very same price. (You’re so excited.) Financially speaking, there were no alternatives; both companies had spent each other into untenable positions, acquiring celebrity talent and launching campaigns competing for the very same subscriber base they may now share. Would have been smarter to figure this shit out a while back, eh guys?
But whatever, this is where they are, bound by their budget books to come together, hoping it’ll save ‘em from insolvency. But most importantly for you, the subscriber: There’s no more competition! Instead of two companies desperate to lure your subscribing dollars via superior content, the monolithic beast will be able to frame their product simply, in a can’t lose scenario: “It’s us or terrestrial.” Where XM and Sirius could have pushed each other to develop interesting new programs and a keep a commitment to good, quality playlists, they’ll now be able to rest easily on the medium’s inherent trump card: commercial-free music. We don’t subscribe (though we used to have Sirius); we’re good with our iPods and Peel. But the loss of another potential filter for new music is a bummer. Granted, the merger may be financially necessary; but does anyone actually think it’ll create a better product?