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SiriusXM: Merger News Updated

Sirius + XMThis morning XM and Sirius executives shed some more light on yesterday’s shocking announcement that the two satellite radio rivals would merge. Here are the highlights on the merger from today’s press conference:

* Provides consumer with best-of-breed programming and innovative products and services; broader content choices.

* Company better positioned to compete in rapidly evolving audio entertainment marketplace; Greater program diversity can address underserved population groups.

* Merged company is more attractive to large national advertisers that have a significant number of media alternatives 13.6.

* Best-in-class combined management team with proven leadership.

* Potential for meaningful value creation through cost savings.

* Merger accelerates and enhances cash flows.

* Anticipated to close by end of 2007.

From an investors stand point, with reduced subscriber acquisition costs and combined back-end operations there are certainly some efficiencies to be gained from this merger. In terms of combining the assets of both firms and serving audiences across the country the outlook probably is not as strong. Instead, for consumers the merger probably means fewer content choices, which is quite contrary to what led to the rise of this new format. However, it’s hard to buy into the argument that by eliminating duplicate channels it creates an opportunity for "greater program diversity." This sounds too similar to an argument made by Clear Channel in their path to dominate terrestrial radio, which has only resulted in homogenization of local radio across the country, is that what’s next for satellite radio?

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