XM-Sirius FCC Reply Debunked NAB ‘Misinformation,’ Parsons Says
XM and Sirius expect by fall to complete their document submissions at the Justice Department and should know soon afterward how the government might rule on their merger proposal, XM Chairman Gary Parsons told analysts in a Q2 earnings call Thursday.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Parsons suggested he is more confident now than before that the merger will go through, buoyed by 1,000 pages of reply comments that XM and Sirius filed this week at the FCC. “If any of you wanted to do a deep dive on the entire essence of audio entertainment in America today, I would recommend to you the 1,000-page filing we made on this,” Parsons said. “I think it very strongly makes our case. Quite candidly, many of the expert parties that reviewed this on an econometric basis, from an efficiencies and synergies basis, I think completely debunked many of the misinformation campaigns that the NAB had put out.”
XM and Sirius “are now several important steps closer” to completing their merger and believe the deal can closed this year, XM CEO Hugh Panero said. “Equally important,” XM still is “focused” on its individual business as it “continues to trend toward an OEM-centric model,” he said. Panero, who is leaving XM in August, said the company was little more than a PowerPoint presentation when he joined 10 years ago. XM then was scorned by skeptics doubting consumers would “pay for radio,” he said. But XM now has 8.2 million-plus subscribers and satellite radio has 14 million total, he said. “Satellite radio is here to stay.”
“As with any merger between two companies, there can be only one CEO of the combined entity,” Panero said. He praised Sirius CEO Mel Karmazin, who would be the combined company’s CEO, as “clearly an accomplished businessman” capable of leading the company after the merger. Parsons would become chairman of the combined company.
In Q-and-A, Panero is leaving now because he felt “the merger had progressed to a significant number of milestones,” he said. “Understanding that there’s going to be one CEO at the end of it, it was time for me to sort of move on,” he said. “This was a great time for me to leave having been with the company for over a decade.” Panero joked that this was his “short answer, rather than to say I was going to spend more time with my kids or explore other options.”
“We're seeing results” from XM’s focusing on OEM, Panero said. In the second quarter the company had the most automotive gross additions, 618,000, in its history, he said. That’s “the best evidence that our anticipated ramp in OEM is here,” he said. Total OEM paid subscriptions reached 3 million, overall conversions improved and churn remained stable, he said. “XM’s management is executing to improve operations and take advantage of existing and future opportunities to grow and strengthen XM’s competitive position in the rapidly evolving audio entertainment market,” Panero said.