XM-Sirius Merger Decisions Expected Early 2008
Justice Department and FCC decisions on the proposed XM- Sirius merger probably won’t come until early 2008, sources said last week. A resolution was expected this year. Sources said DoJ antitrust officials, whose 2007 has been dense with merger work, are putting finishing touches on a recommended decision to go to antitrust chief Thomas Barnett.
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“I had believed it probably would be decided this year,” said Blair Levin, a Stifel Nicolaus analyst. “People usually don’t like to go into the holidays with something hanging, but there’s no deadline.” He said the merger doesn’t face the tight financial deadlines seen in other transactions, such as Tribune Company’s recent privatization.
“The conventional wisdom had been the merger would be approved late this year, but the same staff working on XM- Sirius have been looking at other mergers,” said a satellite industry attorney. “They wanted to close this year, but it doesn’t matter that much if it doesn’t slip for too long.”
FCC Commissioners Jonathan Adelstein and Robert McDowell each indicated last week that they expect a DoJ decision in early 2008, followed by a close FCC examination. DoJ and the FCC likely will scrutinize arguments that satellite radio is part of a larger audio market and not a stand-alone market for the purposes of examining the effect on competition.
“We're hearing that [DoJ] action could be coming shortly, but I don’t want to predict for sure,” Adelstein told NPR. “Then sometime after that presumably the FCC would act, probably in the first quarter of next year.” The merger calls for “a very complicated analysis,” he said.
McDowell looks forward to seeing DoJ’s assessment of the deal, he said during a Thursday news conference. “I don’t have a fully formed view just yet. I want to see [DoJ’s] analysis, which I think will tell us a lot,” he said. “I'll be asking lots of questions in that realm of what is the audio market and what is really national versus local.”