FCC's Martin Hints Satellite Radio Merger Would Be Blocked
January 11, 2007
The ongoing rumors of a merger between XM and Sirius came up once again at yesterday's Citigroup investor conference in Las Vegas. Sirius CEO Mel Karmazin, as well as FCC Chairman Kevin Martin, were on hand at the event and both were asked about the idea.
Karmazin said that a merger could be in the best interests of both satcasters and would be open to such a deal. "One way you can create shareholder value is through consolidation, particularly in a fragmented industry like radio," he said, according to CNN. "Conceptually a deal makes sense and you could add value from synergies."
However, Martin hinted that any potential satellite radio merger would be held up by the FCC. While he wouldn't take a specific stance on the issue, Martin is quoted by Inside Radio as saying that the closest situation would be the way the Commission handled "what we did on [satellite] television." The FCC had blocked a proposed merger between Echostar and DirecTV.
During his speech, Karmazin also defended Howard Stern's recent $82.9 million stock bonus, which was announced earlier this week and coincided with Stern's one-year anniversary at Sirius. "Howard got a bonus for exceeding the consensus subscriber number from Wall Street by more than 2 million," Karmazin said. "In all candor, I hope he hits all of his milestones."
Representing Stern's former employer CBS Corp., President/CEO Les Moonves was also on hand at the conference. He predicted CBS would double its Web revenue in 2007 and noted that CBS Radio had a tough 2006, stemming from Stern jumping ship. "We lost the guy I'm not allowed to legally talk about," Moonves joked, according to CNN.