BIG News On Satellite Merger – 8 Minority Channels
While this news is not an approval of the merger as yet, it is very big in that it offers some new insight into the merger process that was previously not available. Respected analyst George Reed-Dellinger, who has been among the most accurate in terms of the regulatory process throughout the merger published a report today citing new information that could not only pave the way for FCC approval, but also ensure that concessions for the merger could be more reasonable than people thought.
The big news is that Sirius and XM have pledged 8 channels to be leased to minority owners, and that members of the minority in Congress have praised the idea. This 8 channel arrangement has not previously been publicly discussed. Dellinger points out, and I agree that this would diffuse the proposals of 20% of the spectrum sought by Georgetown Partners. As usual, Chester Davenport of Georgetown Partners was not available to comment.
REPORT EXCERPT
George Reed-Dellinger — We believe that recent correspondence from Congress has paved the way for the Federal Communications Commission (FCC) to approve the XM (XMSR-$12)-Sirius (SIRI-$3) in the next few weeks without burdensome conditions. More specifically:
House Commerce Committee Chairman John Dingell (D-MI) asked the Commission to extract restraints on pricing, which the companies have already volunteered, and made no mention of giving back spectrum as a requirement (which the companies oppose). Today’s letter from minority congressmen on the House Telecommunications Subcommittee praised the companies’ pledge to lease eight channels to minority owners. This will help defuse the more aggressive petition by privately owned Georgetown Partners, which asks the FCC to require 20% (sixty channels) for minority programming.
This correspondence from the Democratic Congress lends support to FCC Chairman Kevin Martin in moving the approval forward, without the more burdensome conditions that the Democratic Commissioner’s might be expected to hold out for (spectrum give-back and the Georgetown petition). We have long believed the Chairman was paying only lip service to a goal of gaining a consensus, 5-0 approval of the deal, and would be quite willing to accept (as would the management teams) a 3-2 approval should the Democratic Commissioners oppose the combination. The strongly worded support for the merger by the Department of Justice is likely to have more sway with any court reviewing the case than a Commission vote divided on political grounds. We expect a draft order can now be pieced together and voted on ‘circulation’ as opposed to a May 14th open meeting vote.
Tyler Savery Position – Long Sirius, Long XM
Talk about being held for ransom!
While this may not be as onerous an outcome as it could have been, if true, it is clearly a payoff to the minorities involved rather than something that is done in the public interest.
But it does show just how desperate these two companies are to get the deal done. Pathetic.
Yeah, real desperation, tying-up the only two SDAR providers into one Co.! Leasing-out only 8-channels to minority interest, smacks of “desperation”—NOT!
I think most people who are so opposed to this merger, are 1) disgrunteled shareholders who continue to believe in the deadly “Sirius vs. XM” charade-game, or 2) NAB-leaning special interest groups who want to see this combination destroyed at all cost!
Ring the Freedom Bell, let Freedom ring, Live Free or Die! Live Long, Merge and Prosper!
eom!
Here is a list of the eight proposed channels on the leased spectrum:
1. BET
2. Reverend Jeremiah Wright on black liberation theology hour
3. NBC–National Barackasting Company
4. Jesse Jackson
5. Al Sharpton
6. Micael Vick–on dog breeding, etc.
7. Barry Bonds on why he wants to kill Jose Canseco
8. Chester Davenport’s secretary hour until she runs out of excuses
shakedown!!!!!!!!!!!!!!!!!!!!!
I don’t think Michael Vick should get his own channel. But if it gets the merger done, I guess i’m for it.
Seriously thougt, I wonder why noone else is reproting this letter. Seems like big news, but I only see it here.
I hope its true.
how long are we gonna pretend that theres a market for minority programming.. if the market demands it, itll come.. enough with the horsewhips already.. lets get this bastard approved.
You will see others pick it up in due time
We knew that concessions like these were coming. My question is about the last sentence in the article; if the vote is on a draft order by “circulation,” as opposed to the May 14 meeting, are we guessing that a vote could come BEFORE that meeting, or, and most probably, that a vote could come anytime, and more than likely after the 14th?
I only have this to say, if SIRI/XMSR are the ones pledging the channels it is safe to say they have the people already picked out, and deals are already being worked out. I cant help laughing at this one.
>>>We expect a draft order can now be pieced together and voted on ‘circulation’ as opposed to a May 14th open meeting vote.
I know this is going to come off sounding petty and/or unimportant — but I have a problem with the above statement. The problem I have is that the FCC has NEVER voted on a merger (of this magnatude) or a license transfer application in an open public meeting. Those monthly meetings are held for other reasons and the FCC has NEVER used them for situations like this.
The problem I have — is that when I read “research” come out from “reputable research firms” that make claims like this, it makes me question their conclusions. Could it have been a simple mistake or a bad assumption on the part of George Reed-Dellinger? Absolutely. They could still be very much dead on with this one — but it does raise a caution flag for me when I see “analysts” refer to these open meetings like this. I’ve seen several analysts do this now — perhaps its just an assumption that the FCC would use an open meeting to vote – which has been perpetuated by other analysts and media… regardless they’re all wrong.
Before anyone wants to jump on me — I will provide you with a link supporting my opinion first…
http://www.fcc.gov/osec/archiv.....e.html
I welcome anyone that can find a merger discussion that was brought up or voted on — as well as any license transfer application that was discussed or voted on — at ANY FCC open public meeting. The link above is the agenda for every meeting held in the past 4 years, plus a link to meetings even further back than that.
Perhaps it is petty — but when you see a mistake being passed on by a “reputable firm”, it makes me a bit hesitant to jump on the bandwagon.
–
As for the deal itself — presuming it is 8 channels — that would amount to approximately 192 kbps of bandwidth coming from each service (XM and Sirius). I find it to be doable in the long run, though it is a shakedown.
I further hope that the FCC doesn’t just grant it to Georgetown or any group affiliated with them — their should almost be an auction for the right to lease the bandwidth from XM/Sirius. If not, then XM/Sirius should most certainly have a say in who the group will be — because regardless of what happens, whoever leases the bandwidth will have to do so with cooperation and co-ordination from XM and Sirius. The bandwidth MUST be leased and paid for by the them — and XM/Sirius technology will obviously have to be used by that company… whether they “program” the channels directly for XM and Sirius — or they offer a seperate service that will require an XM/Sirius receiver… the deal will be complicated.
It’s still a shakedown… it will be nice if XM is able to get back the 400+ kbps from Clear Channel this summer — that they got in the arbitration agreement. That deal is just about up. I hope that XM is able to final be rid of Clear Channel for good — because that bandwidth will sure come in handy with this minority settlement.
–
Homer,
I think that George is stating that “in respose” to recent reports that seemed to make a big deal out of the May 14th FCC meeting as being a platform for the merger.
Dellinger is not a financial analyst. He deals with regulators and such, and has a very good handle on how things work with them.
>>>Dellinger is not a financial analyst. He deals with regulators and such, and has a very good handle on how things work with them.
I can agree with this, but the FCC would not put a merger vote or a license transfer application on the agenda of an open public meeting. That is historically well established at this point.
I figured a firm that covers regulatory matters like this, would know this. I guess I was the one making the assumptions then… that these guys would know this. Which is why I also said it could be a simple mistake on their part.
No harm, no foul… but I still procceed cautiously.
–
Homer…
I think they indeed know it, but were trying to nicely say that thoise expecting it to be at a regular meeting should not assume this is the case. Check you yahoo email.
I never figured Sirius caving in to those big-
type “demands” we’ve been hearing about — in
that sense this aspect of the news didn’t seem
that big of a deal to me — because despite
appearances/hype to the contrary, Sirius is not
without a Plan B. But it is a big deal to me
that this is the first time I’m hearing actual
results of the merge-negotiation. Not only does
it decisively rebuff inaccurate speculation by
some of the “irresponsible” pundit-“analysts”,
but the suddenly-open dialogue in itself is the
sign…that it’s done.
minority owned stations? what a joke. So essentially we’ll have 8 more “urban” channels. What dreck. How about a Chinese language music channel. Chinese is the 3rd most spoken language in the US (ahead of eubonics even!).