SiriusBuzz

WASHINGTON and NEW YORK, Feb 29, 2008 /PRNewswire-FirstCall via COMTEX News Network/ — XM Satellite Radio (Nasdaq: XMSR) and SIRIUS Satellite Radio (Nasdaq: SIRI) today announced that the companies have agreed not to exercise their rights to terminate the Merger Agreement until May 1, 2008.

The closing of the pending merger remains subject to satisfaction of all applicable conditions, including approval from the Department of Justice and the Federal Communications Commission. For more information on the SIRIUS-XM merger, please visit www.XMmerger.com or www.SIRIUSmerger.com.

Position - Long Sirius, Long XM

Well, Bubba The Love Sponge is not called a shock jock because he makes friends with everyone. The Sirius Satellite Radio/Cox Communications radio host found himself on the short end of an upset Mark Lunsford, who’s daughter was abducted and murdered. The father, two years after the incident, has indicated that he is going to sue the Citrus County Sheriff’s Department and the Florida Department of Law Enforcement for negligence in the death of his daughter.

Apparently the story is big news in the Tampa Florida area where Bubba hosts a morning show on terrestrial radio, and an afternoon show on Sirius. Bubba, likely trying to be topical and a bit controversial stated on his radio show that Lunsford was only suing to get money. Lunsford took exception and called Bubba to confront him.

In the confrontation Lunsford stated that the suit was not about the money, but instead about invoking a change in policy, and that any money he won would pay his lawyers with the balance donated to the Citrus County Children’s Advocacy Center, named Jessie’s Place, in memory of his daughter.

Well, if Lunsford is being forthright, and indeed the money (the most he can win is $100,000) is donated, Bubba owes the man an apology.

The issue is perhaps that Lunsford is not being above board in this whole issue. It is reported that he started a charity in his daughters name, seeking donations, and doing carnival rides for the charity. Meanwhile his lifestyle has changed, and he drives around in a brand new Hummer 2. People critical of him are calling for an audit of the charity. It is rumored that Bubba The Love Sponge, who was outspokenly critical of Lunsford, was getting ready to expose the whole circus on his radio show.

HMM. If Bubba is right, Lunsford should go crawl under a rock.

The kidnap and murder of Lunsford’s daughter was a terrible crime. The actions of the police department could have been better. How this story unfolds will be interesting to say the least.

Just another story in the unfolding saga of Bubba The Love Sponge.

[ Via Bay News 9 ] [ Call Audio ]

Position - Long Sirius.

Kit Spring, an analyst for Stifel issued a note today on XM’s Q4 and 2007 operating results.

REPORT EXCERPTS

XMSR: First Look: Churn & Conversion Better; But Lack of Expense Control

Financials – were a miss overall: 4Q revenues of $308MM, up 20% YOY, were slightly above our estimate of$305MM and the Street at $303MM.

Adjusted EBITDA loss was $116MM worse than our estimate of $82MM.

EPS loss was $0.78, worse than our estimate of $0.61.

Cash position was $157MM exactly in line with our estimate.

Metrics mixed – great churn and OEM conversion but higher SAC:

4Q gross additions were 1.13MM, up 6% YOY slightly below our estimateof 1.15MM.

OEM gross adds of 766k (up 46%), were below our 800k estimate, while retail gross adds of 364k (down 33%), were slightly above our estimate of 351k.

Monthly churn was 1.72%, down from 1.79% in 4Q06 and below ourestimate of 1.8%, though up from 1.69% in 3Q07.

OEM conversion rate was 53.9% versus our expectation of 52.5% and was the highest rate since 2Q06 despite a deeper penetration into middle and lower-end new cars.

Net subscribers adds were 460k, up 6% YOY but below our estimate of 493k.

Ending subscribers were 9.027MM, within guidance of 9.0-9.2MM, and slightly below our estimate of 9.060MM.

4Q ARPU (average revenue per user per month) were $10.14, above our $10.09 estimate and up 1% YOY.

4Q SAC (subscriber acquisition cost per gross addition) was $87, far above our estimate of $75 and 24% above $70 last year.

4Q CPGA (SAC plus other marketing costs) was $140, far above ourestimate of $127, and $128 in 4Q06.

We plan to update all financials after the conference call which was at 8am ET

Position - Long Sirius, XM

UBS analyst Lucas Binder Issued a report today on XM’s Q4 and Full Year 2007 operating results.

REPORT EXCERPTS

4Q07 Results; Y-O-Y Growth In Net Adds

XMSR reported solid 4Q07 results ahead of our estimates
XMSR reported generally better than expected 4Q07 operating metrics. Highlighted by y-o-y growth in net adds of 460k vs. UBSe of 433k and flat ARPUof $11.71 vs. UBSe of $11.35. Subscriber rev of $266M was slightly better thanUBSe of $261M. Total rev of $308M were better than UBSe of $299M. Reported EPS loss of $(0.78) was worse than UBSe of $(0.56) due to much higher revenue share and royalties.

Settlement with RIAA; lower EBITDA As a result of merger and settlement related charges, EBITDA loss of $(117)M was worse than UBSe of $(72)M. The biggest contributor was $54M more in rev share and royalties, which we believe was associated with the RIAA settlement and trueups for the quarter.

4Q07 conference call XMSR will hold its 4Q07 conference call at 10:00AM. The dial-in number is 877-265-5808, #35479749. Management believes regulatory approval of the merger could be in the “near future”. We expect management to discuss growth in the OEM channel and provide its latest update on the merger process on today’s call.Valuation: Maintain Neutral rating with a $12 price target We base our price target on a detailed DCF analysis, using 3.0% growth in perpetuity and a 13.0% WACC.

Position - Long Sirius, XM

Barrington issued a report today on Sirius’ Q4 and Full year 2007.

REPORT EXCERPTS

Sirius Satellite Radio Inc. (SIRI-NASDAQ )

Estimates Tweaked Higher After Solid Quarter

Investment Highlights

Results for Q4/07 and FY/07 were generally positive, with slightly lower-than-expected revenues, but net earnings above expectations. For the quarter, total revenues were $249.8 million, up 29% over Q4/06. A shift to instant rebates versus mail-in negatively affected ARPU in Q4, particularly since the retail component is higher in the Christmas selling season. Sirius noted that January marks 29 consecutive months of leadership in retail market share versus XM.

Diluted EPS improved to $(0.11) from $(0.17) a year ago, as revenue growth outpaced operating expenses. Our estimates called for diluted EPS of $(0.13) on revenues of $289.4 million, which was in line with the consensus mean estimate for diluted EPS, but higher than the $241.8 estimate for revenues. Full year revenues increased 45% to $922.0 million, while diluted EPS improved to $(0.39) versus $(0.79) in FY/06. Our estimates were for diluted EPS of $(0.40) on revenues of $961.6 million.

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As if on cue, merger opponents are once again getting active with the FCC. In filings today, C3SR, Georgetown Partners, and the Consumer Federation of America all voiced merger opposition again.

C3SR

The C3SR filing consisted of a 33 page rebuttal to the CRA analysis. This time the rebuttal comes from Alan Ingraham and Hal Singer of Criterion Economics. That the opinion of these two matches the opinion of that which has already been filed by Criterion should come as no surprise. The duo feel that the CRA analysis is “misspecified”, that the use of cross sectional data limits CRA’s findings, and that CRA uses an inappropriate amount of granularity for defining the relevant market. C3SR, which claims to be an advocate for satellite radio subscribers but is funded by the National Association of Broadcasters was active early on in the merger process, but has been very inactive in updating their activities, and has never given any data relative to whether or not they are actually carrying forward the opinion of satellite radio subscribers.

GEORGETOWN PARTNERS

At first blush the Georgetown Partners filing seems to indicate that perhaps we will finally get some answers from the group headed by Chester Davenport, but alas, once again all we have are empty proposals. The filing starts out by stating, “…the attached filing is in response to questions raised at meetings with commissioners and staff.”

Davenport instead goes into a “Fix-It-First” explanation, and how his proposal is the “fix” to the problem of competition in the marketplace. Davenport cites various precedent for “fix-it-first” in his filing, but does not address the issue at hand. Basically Davenport argues a narrow market definition of the marketplace and feels his solution is the fix for the situation. However, if the marketplace is broad, then the competitive concerns of Davenport are moot.

CONSUMER FEDERATION OF AMERICA

The filing of the Consumer Federation of America is basically a “reminder note” that the group opposes the merger. The group met with Commissioner Copps and staff on February 19th.

Position - Long Sirius, Long XM

XM Satellite Radio announced operations results today and is conducting their conference call as we write.

Key Notes:

- Revenue of $1.1 Billion
- Subscribers of 9,027,000
- 3.5 million OEM installs in 2007 - over 1,000,000 installs in Q4 alone
- Lawsuits with labels over Inno settlements costs of $13,000,000
- Q4 revenue of $308 million
- Q4 loss of ($239) million
- Full year loss of ($682) million
- Merger and settlement charges were ($86) million including $36m To sound exchange - $30m to merger
- Gross subscriber additions of 1,130,000 (766,000 OEM and 364,000 retail)
- OEM conversion rate of 53.9%
- Churn rate of 1.72%
- ARPU of $11.71
- SAC of $87 - CPGA of $140

Position - Long XM

To celebrate the release of his 17th album, Good Time, superstar Alan Jackson will take over Sirius Satellite Radio’s Prime Country (ch. 61) for five days. The exclusive channel will be hosted by Jackson and feature a preview of the 17 songs on his new album.

Jackson will also share songs and stories from his celebrated career. Alan Jackson Good Time Radio will premiere on Prime Country, this Friday, February 29th at 5 pm ET and run through Tuesday, March 4th.

The Grammy winner and three-time CMA Entertainer of the Year has built a remarkable career, generating an amazing string of hit records since the 1990 release of his debut album, Here in the Real World. Over 18 years, Jackson has amassed an astonishing 31 number one singles, with an additional 15 top five hits, including his current smash, “Small Town Southern Man.” Good Time, due out in stores on March 4th, marks the first album written entirely by Jackson.

Position - Long Sirius

Just two weeks after an ad campaign that expressed a “Love Affair” between terrestrial radio and the recording industry, the National Association of Broadcasters is running a new ad that accuses the recording industry of leaving musical artists “Holding The Bag“.

Once again, the advertising is geared to the political establishment that is weighing various proposals regarding music royalties. Currently terrestrial radio does not pay royalties to artists. The theory is that the exposure that the artists receive on radio carries a value. However, in recent years, the emergence of competing audio entertainment platforms has appeared to erode record sales to a point where the marriage between terrestrial and the recording industry is no longer a happy one.

The labels want money. Terrestrial radio wants status quo.

This issue is one that seems to have the recent focus of the NAB, as it would appear that the matter is coming to a head. Terrestrial radio is facing many changes in the landscape, and in simple terms can no longer sit back fat dumb and happy. Things have changed dramatically in only the last five years, and those changes will continue.

Should artists be rewarded for their work? Yes. Does it happen at the record store? Not anymore. Is terrestrial radio to blame? Not entirely. Artists who create compelling albums are having little problem selling them. Such albums have value to a consumer. Consumers will no longer shell out money for an album with only one good song. Instead, they opt to download it.

This issue is sure to get more exciting….stay tuned.

Yesterday Clear Channel Communications met with FCC Chairman Kevin Martin on the proposed merger between Sirius and XM. The purpose of the meeting? To reiterate their positions outlined in three previous filings with the FCC. It seems that interested parties in the merger have all made their point, made it again, then again, then again.

Maybe Clear Channel feels that they need to catch up with Georgetown Partners who have met with the agency 21 times.

Lets see…..who is next in line??? Was it the NAB, C3SR, or Ibiquity?

Perhaps a merger decision will arise simply because the FCC commissioners will have a desire to clear their calendars for other issues that are before them. Satellite radio seems to have had commissioners attending meetings on a regular basis to go over the same issues time and time again.

Position - Long Sirius, Long XM, No Position Clear Channel