How does providing leased access for 50% of the channel capacity of the merged XM/Sirius entity grab you? Three US senators think that would be an entirely reasonable condition to impose in exchange for allowing the merger to go forward. At a minimium, the trio expects 20% of capacity to go to minorities or non-profits – that would be anywhere from 60 to 150 channels for those of you keeping score at home, as opposed to the 12 for minorities and 12 for non-profits in the capacity budget proposed by FCC Chairman Kevin Martin.
The senators – John Kerry (D-MA), Claire McCaskill (D-MO) and Ben Cardin (D-MD), further want assurance that interoperable receivers are also able to receive other competing services, specifically including HD radio, and that a third party monitors the development of the radios, given the satcasters’ failure to put them on the market after a decades delay. Finally, they want somebody to monitor whether or not the merged entity obeys price caps written into any agreement.
Meanwhile, the companies say they expect to achieve $400M in synergistic savings in 2009, assuming the merger goes through, and could post an EBITDA of $300M if satellite expenses are excluded.
RBR/TVBR observation: Watching politicians and regulators weigh in on XM/Sirius, particularly of the Democratic persuasion, is a lot like watching a child fill out a list for Santa Claus. If too much of this stuff is ratified into a binding contract, the satcasters have said they’ll simply pull the plug on the merger. And we saw somewhere that cable Wall Street watcher Jim Cramer thinks if it isn’t a done deal now, it could drag all the way to September. It looks like the fun isn’t yet over on this one.
