It was only a matter of time before this happened. Several objections have been filed in the Blessing vs. Sirius XM class action lawsuit. The proposed settlement was almost to good to be true, and now there seems to be some substantial legal precedent to back up the objections.
I know some hated the fact that this suit existed. I was contacted by several people who wanted to band together to get this case thrown out. As angering as it might be, Sirius XM was ripe to make out very well with the proposed settlement. In essence they agreed to pay about 13 million in legal fees, and agreed not to raise prices until January of 2011.
From a shareholder standpoint the Blessing vs. Sirius XM suit was a Blessing. For what would amount to $13 million the company could ensure that the merger was not reversed, and could never get sued again by consumers on the issues surrounding the merger, the royalty fee increase, the implementation of an Internet streaming fee, and the implementation of a higher priced family plan. The cash payment of $13 million pales in comparison to the revenue the company collected over the last few years. Thus, even if you thought the suit was bogus, you can now realize that the existence of the suit carried substantial benefits for Sirius XM. It is little wonder they wanted to push the proposed settlement through quickly.
Now to look at this from a consumer perspective. The proposed settlement did lack any real or material benefits for consumers. That is about as simple and straightforward as it gets. The “benefit” was that the company was considering a $3 price increase in August, but would not raise prices til January of 2012. The settlement is based upon a theoretical price increase that possibly may not have happened anyway.
All in all there were 5 objections filed by different people. Don’t look for a resolution to this matter any time soon.
Position – Long Sirius XM Radio