XM, SIRIUS SHAREHOLDERS OVERWHELMINGLY APPROVE MERGER PLAN Jeffrey Yorke – Radio and Records There may be a few rubs at the Department of Justice’s Antitrust Division and from the FCC still to come, but shareholders of XM and Sirius certainly want to see a marriage between the two satellite radio companies. Both groups voted Tuesday (Nov. 13) on the proposed multimillion dollar, all-stock merger and overwhelmingly endorsed it.
XM says its early tabulation of votes -- both proxy and in person -- shows that 99.8% of the Washington, D.C.-based satcaster’s shareholders agreed that one head is better than two. Earlier in the day in New York, Sirius said more than 96% of its shareholders voted to bring the two operations together in one happy, subscriber-based family. Now, it’s just a matter of winning regulatory approval from the DOJ and the FCC. The DOJ is expected to rule on the matter any day now and the FCC expects to make a decision by year’s end.
"Today's vote is the latest demonstration of the strong support for our merger from a wide range of individuals and prestigious organizations who recognize the benefits that a merger will bring to consumers," said XM’s chairman of the Board Gary Parsons. "We are proud to have received support for our merger from organizations representing African Americans, women, rural Americans and Hispanics, as well as from former FCC chairmen and commissioners and a diverse group of elected officials. We appreciate our shareholders' overwhelming support."
Sirius CEO Mel Karmazin also said, "We are pleased with the outcome of today's vote." He, too, thanked shareholders. “We look forward to completing the merger by the end of the year and -- together with XM --becoming an even stronger competitor in the ever-expanding audio entertainment marketplace offering consumers more choices at lower prices."
Meanwhile, a minority-owned, private investment group, Georgetown Partners, wants the FCC to grant it the ability to lease as many as 60 of the combined company’s 300 satellite channels.
Georgetown Partners, headed by managing director and multimillionaire Charles Davenport, who Ebony magazine once profiled in an article on “The New Black Money Men,” recently told the FCC that it was against the satellite merger, but if regulators granted the merger, it should require the new company to turn over some of the satellite channels to a minority-controlled operation, reports The Washington Post. Georgetown Partners claim they fit the bill. The company has invested heavily in wireless and media firms. Without such a requirement, the merger would “bestow upon the combined Sirius-XM a stranglehold on nationwide programming and content,” Davenport wrote, according to The Post.
Georgetown Partners met with the FCC staff last week and said it wants to create free advertising supported programming in addition to subscription-based content.
Sirius and XM have said in a joint statement that “minority voices are well-represented across the Sirius and XM airwaves today and will continue to be in the future.”
NAB spokesman Dennis Wharton told R&R that "NAB believes the merger should be rejected on grounds that competition serves consumers better than monopolies" and he would not even entertain the notion that another satellite company could spring out of the proposed merger.
In an unedited interview filed with the FCC on Tuesday morning, former FCC chairman Reed Hundt said he supported the satellite merger and characterized it as "pro-competitive."
"I think that if XM and Sirius combined, it will be pro-competitive in all likelihood. It seems to me that it is far more likely than not. It seems to me that what has happened over time is that these two firms have proved when kept apart to be incapable of mounting really serious competition against ... terrestrial radio that I had always hoped for.
And it seems to me that there's no indication of any anticompetitive outcome if they do combine, so let's give them a chance to have a sharper point on the arrow and see if they can do better in terms of penetrating the listener audience."
Hundt, a Clinton appointee who was FCC chairman from 1993 through 1997, adds that the early FCC provision that one satellite company could not own both licenses should not be a deal breaker.
"I should just say my thought was this: Let's start out with these two licenses, since it is not clear exactly what is the optimal business model, and then let's let the two firms go at it for a while and see what happens. But it was never the case that these service rules were intended to be written [in] concrete or, like the Constitution of the United States, changed only through an elaborate process. It was an attempt to figure out a good way to get the satellite radio industry off to a pro-competitive start and then in the fullness of time the FCC and the parties and the people in the industry would be able to see, well, what works and what doesn't work, what's happening and what isn't happening." |