Sirus Hearts XM?

Poke

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http://biz.yahoo.com/fool/060627/115142102107.html?.v=1

Sirius Hearts XM?
Tuesday June 27, 11:10 am ET
By Rick Aristotle Munarriz


Speaking at the Convergence 2.0 Conference in New York yesterday, Sirius (Nasdaq: SIRI - News) CEO Mel Karmazin had a different type of convergence in mind when he spoke of rival XM Satellite Radio (Nasdaq: XMSR - News).


"Regarding XM -- would we like to buy them? Sure," he said, before discounting his own words by bringing up the likelihood of the FTC squashing the deal even if the two companies were to agree on terms of a union.

Sirius and XM are a duopoly in satellite radio, and the government is just not going to let them team up to form a monopoly. Four years ago, those same regulators didn't let DirecTV (NYSE: DTV - News) and EchoStar (Nasdaq: DISH - News) merge, and that's with established cable service providers competing with similar offerings to the two satellite television services. XM and Sirius are pretty much on their own island when it comes to premium digital radio offerings.

This doesn't mean that Sirius and XM will remain independent forever. It's just that a merger is likely to involve a larger media player. DirecTV and Dish parent EchoStar are possible suitors. And they already have alliances; DirecTV offers XM music channels on its service and EchoStar features Sirius audio streams.

News Corp. (NYSE: NWS - News) is another potential nibbler. It owns a stake in DirecTV, so it's already in tune with XM, and is a major player in satellite entertainment overseas through Sky in Europe.

DirecTV, EchoStar, and News Corp. would have plenty to gain by gobbling up one of the two fast-growing satellite radio upstarts, and that alone may persuade more conventional media conglomerates like Comcast (Nasdaq: CMCSA - News) or Time Warner (Nasdaq: TWX - News) to hold up their bidding cards.

If it does happen, it's likely to happen sooner rather than later. If XM and Sirius hit their mark and start producing positive operating cash flow in a few quarters, a lot of the bearish sentiment that has been marinating the stocks in recent months will evaporate. Prices will start inching higher -- creating less of an incentive for XM and Sirius to cash out -- and much higher prices, which the potential acquirers may not be willing to pay.

Wedding bells may happen. Just don't expect it to be XM and Sirius walking down the altar holding hands. They would never get through that pesky "is there anyone here today that has reason to believe that these two should not be wed" part.
 
Scott Greczkowski

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I dont know why everyone is getting excited about, Mel was at a conference and someone asked him if he would like to buy XM and he said he would love to.

The press is making it seem like we could hear an announcement of a merger son when all Mel did was make a comment when asked a question.

Besides Sirius does not have the money to buy XM at this point in time.
 
Peter Parker

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It makes good copy but it has little relevance. We have no evidence that Sirius is doing anything about this and the XM response was that they do not comment on the wishful thinking of their competitors.
 
Purogamer

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Scott said the same thing I said yesterday in the other thread about this exact topic...
 
G

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You mean news media blows things out of proportion? No?! They can make news when there really isn't any? I don't believe it! Well i know CNN and MSNBC would definately never do such a thing. That is as fair and real as it gets there. And that Dan Rather, he is the best.
Gees. I like there being two of them. It opens competition and things to discuss with your tech buddies. My thing is I LOVE Sirius, and also prefer Directv. I sure wish the audio offererings were reversed. i have honestly considered switching from DTV after 5+ years with them, for this reason. While I would not say XM plays nothing I like, I just enjoy what Sirius has to offer much much more.
 
Sirius_Rich

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As a shareholder of both companies I loved all the press, both stocks seem to have bottomed and are up dramatically since Mel's comments. I really did not and do not think this will happen, but still love the press.
 

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