The well-orchestrated announcement of an agreement between Sirius and XM — slow-news, market-closed Presidents’ Day, week when Congress is in recess, a day between the announcement and the analysts’ call — is just the beginning of a long journey likely to take the rest of this year and possibly wend into next. Allies and foes are lining up while pundits, analysts and the like try to parse the deal’s chances. Can it fare better than the ill-fated satellite TV effort? Has enough changed in Washington? Will the NAB’s opposition hurt or actually help CEO Sirius Mel Karmazin (who once helped fund their efforts to keep satellite radio from becoming reality) and XM Chairman Gary Parsons as they lobby for approval? The two men who would lead the combined company did their best to bat down as many concerns as possible while analysts who have given up believing the companies can survive apart sought assurance that they can survive as one.
From the call (WSJ has the Thomson transcript):
On getting approval: Karmazin: ‘We believe there is a solid basis for approval and are committed to work with the regulatory agencies to ensure approval.” Parsons repeated the “solid basis” line so they have that talking point down pat.
Promises, promises: Karmazin’s list runs the gamut from promised programming for the underserved to radios that are “smaller, lighter, simpler, and cooler” than each can provide separately. Karmazin: “Over time, we will look to combine our satellite and terrestrial transmission infrastructure to deliver the broadest range of content and the highest level of service quality. Finally, we’ll use our combined resources to improve upon our nascent non-audio services, like Backseat Video, real-time
traffic and weather, and other infotainment-style data services.”
On negotiations with RIAA: Karmazin said the two companies will continue to negotiate separately with the RIAA about music license fees. But, he said: “We’re far apart on where we think our royalties should be. We believe we are paying far more money as a percentage of our revenue than we should be and we’ve made some pretty compelling arguments in our filings and to give the other side their fair due, they feel that we’re not paying enough.”
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