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Thread: Forbes Article on the Merger

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    demonotaku is offline
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    Forbes Article on the Merger

    http://www.forbes.com/finance/2008/0...apbox_inl.html

    For those who haven't had time to read off it all of it here is the main bullet points,


    Even so, half the new 2008 vehicles will be coming down the assembly line with satellite radio players installed at the factory. That reflects the conviction of the car manufacturers that satellite radio is an important feature in a new car. About half of car buyers with a unit installed become subscribers who mail in about $110 per year. That's 3 million new subscribers and $330 million additional revenue to the combined company.

    Sirius has said for years that having 20 million subscribers was the critical mass number needed for effective marketing to national advertisers (for inclusion only in talk shows). With the merger, they will exceed that number by year end.

    Controlling costs, imposing discipline throughout the merged companies and eliminating duplicative programming efforts will contribute a lot to the improved results. Renegotiating sports contracts with the National Football League and Major League Baseball is likely, too. Unifying the business models for the various car companies will also result in some savings and better subscriber acquisition costs. Net of the $70 million lost to higher interest charges, management thinks all these savings will approximate $330 million in the first year of the merger.

    At the moment, merging Sirius with XM looks like a hollow victory for Karmazin. But as the company swings to a full year of positive EBITDA (earnings before interest, taxes, depreciation and amortization) in 2009, positive cash flow in 2010 and earnings in 2011, we will have a better view of what this medium can become.
    Last edited by demonotaku; 09-05-2008 at 09:15 PM.

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