XM-Sirius Merger Approved by DOJ
The Sirius-XM merger is one step closer to fruition.
The U.S. Justice Department approved the merger between satellite radio companies Sirius and XM Monday, more than a year after the two companies first announced their deal.
In its decision, the Department of Justice had to determine whether an XM-Sirius merger was anti-competitive, or if other media companies such as Clear Channel (CCU, Fortune 500), CBS (CBS, Fortune 500), or even Apple (AAPL, Fortune 500) with its iTunes software and iPod music player served as alternate options for music and media customers.
The Federal Communications Commission must also approve the deal before it can officially be completed. The FCC has yet to make a decision on the deal.
It’s simply ridiculous that it takes this long to get a decision. I don’t have any problem with the government having merger oversight — even Adam Smith recognized anti-trust measures as a legitimate reason for regulation — but the process ought be much speedier. The companies in question could go out of business waiting for approval for a move that would save them.
On the merits, given the vast number of outlets through which one can get music for one’s vehicle, the idea that a merger between two small companies would constitute a “monopoly” strikes me as absurd. But it’s true that there would be no competition in the national commercial-free market and the merged companies would be more free to raise subscription prices.
Full disclosure: My wife and I are subscribers to XM and Sirius, respectively. I inherited the latter from her after she subscribed and didn’t find it worthwhile and have kept it almost exclusively for NFL Radio. Her car came with XM built in and she’s paid to keep it, even though she hardly listens to it, mostly for long trips. In the short term, we’d benefit from the consolidation.