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Sirius Still Waiting to Buy XM. Is Satellite Radio Dead?


With all the trouble Sirius is having with its pending acquisition of rival satellite radio service XM, you'd halfway believe the rumors that Google was to buy Sirius. About a year after announcing plans to take on XM, Sirius has faced nearly 10 months of investigation by U.S. government antitrust lawyers.

What's the holdup? Some say that the Department of Justice is whirring away, putting a case together in order to block the deal in federal court, according to a Reuters article. But it appears that the complexity of such a merger was underestimated by all parties involved.

car-satellite-ipod.pngIn the mean time, does anyone still use satellite radio? I think we used it in the car twice, as a substitute for our unpopulated iPod at the time. It seems like a great back up option, but not a primary alternative for the regular radio, which is still free. In all honesty, what pisses you off more: commercials, or repetitive playlists?

For me, it's the latter, and that's something that Satellite radio still hasn't tackled to my satisfaction. It's like cable; all these channels and still nothing to listen to. By Sirius' accounts, however, the merging of its own service with XM would help curb all these frustrations, lending more options to the consumer, and actually proving good for the public. Not to mention the lower prices that Sirius has also proposed, once the merger goes through.

xm-logo.pngI'm not sure how that will help in the long run, but if Clear Channel can buy up every station across the U.S., why can't Sirius and XM get together? That may be another story all its own. The FCC has an option to enforce a 1997 act that prohibits the two companies from merging, but the general belief is that the FCC will be following the lead of the Department of Justice (right now, that's not a good look).

And glancing at the stock prices of Sirius and XM, Sirius has seen far more stable days than XM, which is rather indicative of the acquisition's ongoing circumstances. XM shareholders stand to come out ok in the end, with 4.6 shares of Sirius common stock for every share of XM owned. That is, if the merger is approved, and Sirius can actually make it work. Satellite radio has yet to prove itself as the viable alternative everyone had hoped for.

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