What’s next for Sirius/XM?

Well after much debate and discussion with the good folks at the FCC, Sirius and XM joined forces late last year to create Sirius/XM – and a monopoly in satellite radio.

Here we are just a few months later and Sirius/XM appears headed for either bankruptcy or a takeover.

Here’s what you need to know:

1. Will a takeover by the folks at Dish Network or Echostar mean that Sirius/XM can get around the three-year price freeze that the FCC put in place as part of the merger deal?

I don’t think so, though there is a provision in there that allows for “cost pass throughs.” I guess the note I got from XM recently telling me that my wife’s “buddy” subscription is going up $2 a month is a pass through thing…

2. What will this mean for the average subscriber?

If they file bankruptcy, big-name talents (see Stern, Howard) may have their contracts terminated in court-ordered cost-cutting measures. If they’re bought up by Dish (the more likely scenario), I can’t see much changing – until the long-term contracts with the NFL, MLB, NBA, etc. expire. Then, we may be in for some trouble as Charlie Ergen, the head honcho at Dish/Echostar, is notoriously hard to deal with at a bargaining table (see TV, Gol).

Are the other merger requirements being met?

Sort of. We have the “Best-of” packages available for both Sirius and XM users and Sirius has an a-la-carte plan in place, but the choices for compatible radios and XM programming packages aren’t really there yet.

Now what?

Frankly, I think Sirius/XM has run itself into the ground with big spending on the NFL contract and the Stern deal. Both make for great radio, but they overpaid for both. Ergen cas the cash to pump up the company – and even though I’d like to slap him for robbing me of Gol TV – he’s good at making money in the satellite industry.


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