Up in the Air
While the FCC is, at press time, considering the merger, some states have taken matters into their own hands. At the end of March, the Alabama House of Representatives unanimously passed a House Joint Resolution voicing opposition to the proposed “monopoly merger of XM and Sirius,” said Dennis Wharton, executive vice president of media relations for the National Association of Broadcasters (NAB), a trade association in Washington, D.C., that advocates on behalf of more than 8,300 free, local radio and television stations. “It is our hope that similar resolutions will be introduced in other states.”
Last month during a hearing between both satellite radio companies and the Senate’s antitrust panel, the merger met with concern despite the companies’ claims that they are not seeking to eliminate competition nor raise prices. Mel Karmazin, Sirius CEO, argues that a combined company would still face competition from music, news and sports broadcasting.
“The combination is the next logical step in the evolution of audio entertainment,” Karmazin said, explaining the combined company would “enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses.” The question is whether satellite radio would be an easier sell for audio dealers, who stand to gain or lose from the merger either way.