Throughout this merger process, it has become clear that Chester Davenport of Georgetown Partners can dance. Whether or not he can run a radio business is unknown, but he sure can muster up his two-step at the offices of Kevin Martin and the other commissioners of the FCC.
In seeing all of the meetings with the FCC, it is amazing that very little detail has been offered by Mr. Davenport and Georgetown Partners. In previous articles, we here at Sirius Buzz have made efforts to outline a list of questions that are reasonable, and should be answered (Jesse Jackson and Rainbow Push Teleconference with Chairman Martin).
Now, realistically it is possible that Mr. Davenport and Georgetown Partners are not familiar with Sirius Buzz. We are only a small site, and may not even be on Mr. Davenport's radar screen. This is exactly why we have tried to contact Mr. Davenport for over a week now. This week alone, Mr. Davenport has danced and hidden every day (I guess he could be unavailable, but one would think if this merger issue is so important to him, he would take a few minutes to share his thoughts on what has transpired so far). He has my number in the office, and should even have it on his caller I.D. at home (his home was inadvertently my first call to him). Look at the dancing (business) here, and this is just this week!
- Monday - Mr. Davenport was in a meeting
- Tuesday - Mr. Davenport is on a call
- Wednesday - Oh, Mr. Savery, I will pass along that you called
- Thursday - Mr. Davenport is not available
- Friday - Mr. Davenport can not speak now, I will pass along your message to someone else.
The questions posed to Chester Davenport are simple. They will shed light on his proposal, as well as his intentions. Perhaps the issue is that Mr. davenport does not really want the answers to these questions known. In review, here are some of the questions sector watchers would like answers to:
1. How much money is Georgetown Partners willing to lease 20% of the spectrum for?
I realize that this is sensitive information, but realistically, I think it is fair that we at least see the ballpark Mr. davenport is in. If we can establish this, then realistic dialogue can transpire.
2. Will Georgetown Partners help pay marketing costs?
Another reasonable question. He is seeking a ready made business. Will he market his business himself, or rely on satellite radio's efforts. There is a value here. We are merely trying to see if Georgetown Partners is willing to pay for this.
3. Will Georgetown Partners help pay customer service costs?
Again, via his proposal, he will be seeing a value here. Is it a separate line item cost, or built into the lease cost as a package deal?
4. Will they help pay capex costs?
Satellites must be built, launched and maintained. Built into the "lease" or a separate cost?
5. Will they pay royalty costs?
Given the costs of these royalties, one would assume that he would pay his own. But, given all of the meetings with no real detail, this question must be asked.
6. Will Georgetown Partners pay chipset subsidies?
If open access happens, he may not have to. However, we must look at things as they exist now. Via his proposal, he will be in every satellite radio. Even those from the past. A chipset subsidy expense sharing program should be considered. I also think it should go retroactive to all 36 million existing radios.
7. Will Georgetown Partners pay revenue share costs to partners?
HMMMM.....GM, Ford, DCX, etc. all get a chunk of revenue from SDARS. Will Mr. Davenport participate?
8. Will Georgetown Partners pay radio rebate costs?
Rebates are a cost of doing business. Will Mr. Davenport participate here?
9. What types of programming is Georgetown Partners really proposing? How many music channels? What genres? How many talk channels? How many channels will be dedicated to various minorities?
In my opinion, Mr. Davenport is hiding here. He advertises his proposed service as "Family Friendly Programming That Meets FCC Decency Standards". By point of fact, every existing terrestrial radio station that exists today fits this description. Is this the intent?
10. Does Georgetown Partners intend to control this operation, or simply act as a middleman selling off space to terrestrial radio giants?
This question is very interesting. Is it davenport's intent to control this spectrum himself, or to offer up channels to the CBS's and Clear Channels of the world?
11. How much ad revenue does Georgetown Partners plan on generating? Will they target the same advertisers that Sirius and XM are targeting? Will they target the same advertisers that terrestrial radio is targeting?
How will this work. NAB wants no local ads on SDARS. Davenport wants an ad supported service.
12. Can Georgetown Partners present a business plan? How long do they anticipate for the business to be profitable? Does Georgetown Partners have pockets deep enough to launch such a business? Is their business really viable?
Perhaps this question is over the top. However, it needs to be determined if davenport having this spectrum is in the public interest. He needs to be able to afford to run a business. Look how long the WCS spectrum has sat wallowing!!
It was my hope that Mr. Davenport or Georgetown Partners would step up to the plate. If their intentions are honorable, and above board, there should be no issue with shedding a bit more light on the subject. Mr. Davenport, when you ask for 20% of anything you should be prepared to outline compelling reasons for your request. To date all we have seen is dancing and hiding.
Position - Long Sirius, Long XM