XM/Sirius: Analyst argues that time not of the essence


Tyler Savery of seekingalpha.com says he’s amused by many of the theories bouncing around as to why the regulatory is taking so long to announce a decision on the merger of satcasters XM and Sirius. The length of time is seen as both a positive and a negative, depending on who is doing the viewing. However, looking at the negatives, he said if the merger was a slam-dunk denial as some argue, then it would have been dispensed with long ago. The positive view, that the agencies are taking a long time to make sure all details are triple-checked before granting what figures to be a controversial approval, holds only a little bit more water, since that process has been ongoing from the beginning anyway.

He sees political pressure as a possible anchor. Since many in Congress are engaged in this and offered opinions early in the process, it puts more of a premium on handling the matter carefully. Less responsible is the presence of strong opposition from competitors — that is a given in any major merger.

The bottom line is that approval will hinge on market definition. If you are of the mind that XM and Sirius are unique and compete most acutely with one another, it will be shot down. If it is seen as just another audio delivery medium, it will probably be approved. Savery’s bottom line is that the length of the regulatory process is not a good reason to either abandon or invest in either company.

RBR/TVBR observation: We continue to agree with the antitrust experts we’ve heard. These companies were chartered as being forever apart and in competition with one another for a reason; they provide a service that no other company can; and merging them will be a detriment both to consumers and suppliers that deal with either.