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.
Check out Sirius 22. They could vary the playlist more, but it’s the station that my Sirius is on for most of the offseason.
I’m glad that’s over with. Now let’s see what improvements are in store for subscribers to both services.
Eh. That’s a small risk compared to the possibility of a monopoly creating bad merger.
Or in other words- one role of government is to stand athwart the history of corporate armageddon, yelling “Stop.”
Bingo. Never forget – People have rights. Companies do not.
FWIW, I’ve had Sirius for several years, and I practically couldn’t live without it. I have grown to actively loathe commercial radio because of the ever-increasing ratio of commercials to music, and the complete lack of variation or innovation. Even the most “cutting-edge” commercial stations I can get, when I am forced away from my car radio, are typically playing things I heard over a year ago on Alt Nation or Left Of Center.
Never forget, companies are owned by people. And they employ people. If Sirius and XM go bust, people will get hurt.
If that’s the choice of other people, via the market, that’s the cost of doing business. If it’s the fault of government, through dithering, it’s tyranny.
I agree with James that there is no reason for the decision process to take so long.
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.
There is nothing to stop competition in that market from developing, but concerns over prices may be realistic, but then to raise them past the point of affordablity would be shooting themselves in the foot.
We have had XM for years. I listen to certain channels, it is great for long car trips, but my problem is that most of the music stations do not play the “clean” versions of songs, so my kids generally have to listen to the commercial radio stations that do.
I wish some of the music stations that play the music they like would offer the same music, but the clean versions, so far they haven’t done that.
This is one of the sillier examples of allowing a bumper sticker to replace thought I’ve seen recently.
Of course companies have rights. People who tend to reflexively look upon profit-making as somehow dirty also tend not to grasp the purpose of the corporate form. The legal fiction of non-natural persons exists to promote entrepreneurship. The corporate form provides some protection from personal liability to encourage risk taking.
There’s no rational difference between a small company and a large one. After all, a large company is almost always a small one that succeeded (and where it isn’t, it is at least a successor in interest to one such). In short, a small company that becomes a large one is a company that identified a need and filled it, giving people something they wanted and/or needed.
We do not invest the full panoply of rights in non-natural persons that we do in natural persons, of course. Some simply don’t fit. But where they serve the purpose of the corporate form (i.e., the right to contract, the right to seek redress of grievances, and so on), companies have the exact same rights people do.
Sure, but as before that in no way confers on the companies any rights whatsoever. And sometimes more people are hurt by letting companies do anything they like than by holding them in check. In fact, usually that is the case.
Bull. If it is the fault of the government because it is providing reasonable safeguards then it is *prudence* and should be applauded.
What Tlaloc said.
If Sirius and XM go bust, it’s most likely because they had crap business plans and/or tried to sell something the market didn’t want. Companies don’t have lives to ruin. Companies can find other products to sell, and employees can find other places to work, but consumer can’t find other lives to lead.
The only reason companies exist is to make a profit for the owners/investors. What rights should/could/does a company have? I don’t believe Dodd’s examples hold – those are rights of a company only as a proxy for the collective will of the investors, not rights of the company per se. If companies have a “right” to be profitable, how do you balance that against any right a human being has? How do you even reconcile that idea with the term “free market”?
Ya know, I’m going to requote this one, the next time we see the usual suspects demanding high paying jobs.
Where do you figure those jobs to come from?
If the government sinks them because of unnecessary ‘dithering,’ that is not ‘reasonable.’ Calling bull on him is therefore inapposite.
There’s a disconnect in here somewhere I cannot follow. Companies don’t necessarily exist soley to make a profit; that’s a couple of steps down the road from the basic purpose of the corporate form. More than a few companies (even some which are notionally for-profit) are not, in fact, actually intended ever to make a profit. And I certainly never said (or implied or even suggested) that any company has a “‘right’ to be profitable”.
At the most basic level, the purpose of a company is that it is a separate entity from its owners. Part and parcel of that is that the lawnecessarily treats companies as (non-natural) persons. They stand in the place of the (natural) persons who own them for the purpose of protecting those (natural) persons from personal liability. Therefore, as (non-natural) persons, companies must have certain rights. It doesn’t make sense, however, to say that a company’s rights are held by proxy for the owners because the entire purpose of the corporate form is to separate owners from the company as existents. In fact, when a company is insufficiently distinct from its owners (when, as we say, it is merely an alter ego for the onwers’ personal activities), the owners lose the protection of the corporate form (we ‘pierce the veil’).
The question at the end is therefore incomprehensible to me. The free market absolutely and completely depends upon the notion of non-natural persons having rights. If companies did not have rights independent of their owners, no contract with a company would ever be enforceable, no title to property would ever be secure, and we would have to do pretty much all economic transactions by means of immediately consummated barter.
OK, I’m not sure I agree completely, but I do follow you – a company, above the level of an individually owned & operated storefront, serves as a layer to protect the owner/investors from bankruptcy if the business fails. This encourages entrepreneurship & overall economic growth and also covers (as you note) not-for-profits.
But if companies have significant rights of their own, then how does one define the limitations of those rights or compare them to the rights of human beings? How does a threat to the existence of a corporation compare to a threat to the life of a person? If I sue a company for breach of contract (for example), the money I might win doesn’t appear out of nowhere; it represents the at-risk funds of the investors & potential liability of the decision-makers within the company. Perhaps it would be better to say that the rights of a company are inseparable from those of the people responsible for funding & operating it.
I just have an instinctive bad reaction to the idea of granting rights to a non-human entity that can’t really be punished for the misuse of those rights – dissolving a corporation really can’t be equated to a prison term or the death penalty. Instead of being an economic buffer between the funding of the principals and bankruptcy risk, corporations become a moral buffer between the potentially dangerous decisions of the principals and the real-world impacts of human beings.
We grant rights to companies as needed for them to fulfill their purposes – which are, as has been noted already, ultimately people’s purposes. And the limits on those right are set in accordance with their purpose. As I also said right up front, we don’t grant them all the same rights as people or even the full scope of all the ones we do grant (for instance, a company’s free speech rights will rather more restricted than a person’s often as not). A company’s very right to exist is, unlike a person’s, subject to restrictions and rules. You have to give full on Due Process to terminate a person’s life; the government can terminate a company for not filing a form. My point being that such those comparisons just aren’t meaningful.
Of course you can’t send a corporation to jail; you can generally only sue it for money damages (and occasionally for specific performance or injunctive relief). But the overwhelming majority of the time you have a legal dispute with a natural person, it’s the same (except that, under the XIIIth Amendment, you can’t get specific performance of a promise from a person in most circumstances).
But they are separable, by definition. Your judgment represents a claim against the assets of the company – but probably not a basis for liability on the part of the company’s decision makers (indemnification of principals is pretty much SOP).
I actually do understand your visceral reaction, but remember that we only set up all these legal fictions to further our own ends. In that sense, yes, a company’s rights are merely extensions of its owners’. But they only serve their function if they’re held independent of those owners. Does that make sense?
OK, tell you what; I’ll buy into the concept of corporations not having rights when we stop taxing them.
You know… no taxation without representation…. that kinda thing?