Concessions Outlined By Sirius And XM
Yesterday we indicated in our article Merger Signed Sealed And Awaiting Delivery , that the formal letter outlining the concessions of the merger would be posted to the FCC website this morning. This has now happened, and the market will now be able to digest exactly what the FCC commissioners are voting on. This letter represents the agreements that Sirius and XM have made regarding the merger, and the issues that the commissioners will consider with the draft order issued by the FCC Chairman Kevin Martin. Concessions include:
A-LA-CARTE PROGRAMMING
- 50 channels for $6.99 with additional channels priced at $.25 cents each. Capped at $12.95
- 100 channels for $14.99
- A-La-Carte radios will be available within three months
BEST OF BOTH PROGRAMMING
- Subscriber will receive their base service (Sirius or XM) and will get the best of the other service for $16.99
MOSTLY MUSIC OR SPORTS NEWS AND TALK
- Available for $9.99
FAMILY FRIENDLY
- An $11.95 price for base subscriptions and a $14.95 price for the best of both subscriptions.
PUBLIC INTEREST CHANNELS
- The combined company will set aside 4% of the full time channels. Part time channels get aggregated. This currently represents 6 channels from Sirius and 6 channels from XM.
- An additional 4% will be leased to a qualified entity which Sirius and XM have no editorial control. The 4% will be maintained as compression technology advances.
OPEN ACCESS
- To be included within 1 year of the merger.
SERVICE TO PUERTO RICO
- Service within three months of merger
INTEROPERABLE RECEIVERS
- Available within 1 year of merger
RATE FREEZE
- 36 month rate freeze
In my opinion the concessions outlined are not overly burdensome, and do not strip away synergies of the merger. many concessions are outlined for public interest, and in the interest of the consumer. Sirius and XM maintain control over their network, and can grow their business as technology advances.
[ FCC Filing ]
Position – Long Sirius, XM.
Sign me up.
What gives? The stock has given up all of yesterday’s gains. It seems that the market couldn’t care less whether these companies merge or not. Good news means nothing.
The only part I dont like about it is the fact that the 8% of the channels they are giving up, they are doing for free.
I guess my only reservation about THAT is the fact that they do not mention that these channels will be BROADCAST for free, so you would still have to become a subscriber in order to listen, though that doesnt really sound like public interest then, does it? It still disgusts me that the “minority” set aside is there. That is nothing more than “reverse racism”. I do not qualify for one of those channels simply because I am white. I feel discriminated.
Ok…so it’s out there. COME ON TATE, McDOWELL, COPPS and ADELSTEIN!!!
You’ve had nearly 2 FUCKING YEARS TO MULL THIS OVER….NOW FUCKING DECIDE….
TODAY if possible…if not…by the end of this week or so help me God I’m going to get ANGRY! And you WOULDN’T like me when I’m ANGRY!
Sincerely,
The Incredible HULK 😛
Newman,
You shouldn’t feel discriminated against….because you “qualify” for a lot of channels. In fact, 84 percent of them. That’s a lot of channels that the “white” guy can listen to.
Just finished reading the latest from the Wall Street Journal about several members of the Congressional Black Caucus once again lobbying the FCC demanding 20% of the Spectrum be given as previously demanded by Georgetown Partners with 86 channels given to minorities.
I contacted some Congressmen and was told that emphatically that Congress has no jurisdiction over this merger that it is up to the FCC.
This is political on their part. In my humble opinion, they are being obstructionist, hurting investors, the economy, the consumer and denying a state of the art Satellite System for America and Puerto Rico.
If America had had this kind of double think in creating NASA and the first flight to the moon it would never have happened.
brad Said on June 17th, 2008 at 12:48 pm
“What gives? The stock has given up all of yesterday’s gains. It seems that the market couldn’t care less whether these companies merge or not. Good news means nothing.”
I think some people believed the reports that said the merger was approved yesterday. Once they realized that it was not approved and that there was really no REAL news, they dumped. We need the actual approval for anything to really happen, even just a little.
I don’t think all the concessions that came out helped either. Although these concessions don’t really seem like that much more than what was already expected by most.
Newman, I dont get where you see 8%. It is 4% (Public Knowledge) that is free and we all knew that was coming. The other 4% is leased, that insinuates they get paid for it.
I have to say, the concession that bothers me most, is the one that makes them provide service to Puerto Rico. My god that makes me so mad. Someone should tell Martin good job in extracting that one. WHAT DO THEY WANT BLOOD FROM A STONE. I mean hell now they are going to have to deal with a new pool of potential subscribers. Dam the FCC, dam them!!!!!!!!
Down another 5 cents this morning….this stock is beyond comprehension.
I just have to comment again. I keep reading the concession and I just cant help but laugh. If you people are shareholders in SIRI you have got to love Mel Karmazin. Good old “something for nothing” Mel. LOL, unbelievable!
>>>I dont get where you see 8%. It is 4% (Public Knowledge) that is free and we all knew that was coming. The other 4% is leased, that insinuates they get paid for it.
John, the concessions letter from Sirius/XM stated that the minority “qualified entity” that takes over the 4%, would not have to pay for the leasing. It was pretty specific about it, in fact.
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homer, I did not read this:A Qualified Entity includes any entity that is majority-owned by persons who are African
American, not of Hispanic origin; Asian or Pacific Islanders; American Indians or Alaskan Natives; or
Hispanics . At the bottom in smaller print.
I had thought that the first paragraph was dealing with minorities were they discussed leasing. and the second was dealing with Public Knowledge were they said no payments were going to be paid.
Just gos to show me, that I should read the small print.
I still dont think it to be that much of a big deal. It is still a small amount to give up.
I would just like to see the stock make it past 4.00 so I can sell and enjoy a modest gain as opposed to a major loss.