More Opinion by The Springboard

THE UPRISING OF THE AMERICAN PARTY "Clearly the voters are engaged right now, at least for sure on the republican side, and what they have concluded is that the republican party has not done their job. Thus, Donald Trump gets their vote."

Saturday, January 26, 2008

WAITING FOR THE GOVERNMENT TO GET SIRIUS

For almost the past year we have been waiting to get some kind of an answer from the antitrust people in our government regarding the proposed merger between XM Satellite Radio Holdings Inc. [XMSR] and Sirius Satellite Radio Inc. [SIRI]. I must say that I'm becoming a bit impatient. Of course I want the deal to go through as I've placed my bets on Sirius Satellite Radio, and frankly the shares aren't worth a whole lot without a signed deal. Comparatively neither are the shares in XM. We absolutey need a deal like this to return value to the shareholders of either of these two companies.

The facts are simple. Neither XM nor Sirius are profitable as standalone companies. Furthermore, the satellite radio business with only 5% of the market is miniscule in comparison to regular radio, and to be fair so far the whole concept of subscriber-based commercial free radio really hasn't captured the hearts and minds of many. Without a merger it would seem unlikely that either of the two companies could ever stand a chance to be profitable.

It would be a monopoly in the sense that naturally, there would no other company in the marketplace. But here's the problem; if satellite radio as a business currently doesn't seem to be viable, how in the world can that be a monopoly? If the two companies combined were to try to gouge their paying subscribers then they would simply leave satellite radio in the dust and return to the old tried and true regular radio. It's not like electricity, or gasoline, or the old Ma Bell.

Besides, it's actually in the cosumer's interests if you consider that a merger between the two companies would further expand compatibility, programming, value, and interest in its format. That, in turn, would spur on the kind of competition the antitrust people are looking for. Eventually other players will enter the marketplace if they see there is space for their products and services. And a merger between XM and Sirius could also better define what satellite radio wants to be, and how it intends to compete in the marketplace with its much bigger competitor; your local radio station.

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