Influence Peddling And The XM-Sirius Merger

Timothy Carney at the Washington Examiner reports that the National Association of Broadcasters is engaging in a high-profile campaign to block the proposed merger of satellite radio companies XM and Sirius:

While engaging in this high-priced lobbying campaign to inflict a possibly mortal wound to their competitor, the broadcasters accuse the satellite companies of “seek[ing] a government bail-out to avoid competing in the marketplace.”

The National Association of Broadcasters, an influential organization with a $20 million building in downtown Washington, D.C., and an $7 million annual lobbying budget, is leading the charge to block the proposed the merger, either through the Federal Communications Commission or the Department of Justice.

To make their case to DOJ that Sirius and XM should not be allowed to join, the broadcasters have hired the guy who used to run DOJ — former attorney general John Ashcroft. He was a Republican senator from Missouri before his appointment by President Bush as the nation’s top legal official.

As Carney reports, Ashcroft and the NAB are arguing that allowing the merger to go through would create a monopoly that would threaten their industry, but the numbers just don’t support that assertion:

Sirius and XM hardly look like the 900-pound gorilla in this fight. Compared to the $1.49 billion in combined annual revenues of Sirius and XM, Clear Channel Communications, the largest member of NAB, pulled in $1.97 billion in revenues last quarter. Clear Channel boasts of 110 million listeners, while XM and Sirius combined have 12 million subscribers.

One member of the NAB earned more money than the entire satellite radio industry combined. It has ten times as many listeners as XM and Sirius combined. And yet, according the NAB and it’s hired gun, merging the two companies would harm the broadcast industry.

There is, of course, no small degree of self-interest on the part of the NAB and it’s members in the fate of XM and Sirius. If the merger is blocked, one or perhaps both companies will be forced into bankruptcy protection where, potentially, their assets could be acquired at fire sale prices. Conceivably, one or both of these companies could go out of busines entirely. Thus, blocking the merger could mean eliminating potential competitors and acquiring an entire satellite radio network at bargain prices.

H/T: James Joyner

  • Paul S Lunsford

    What about the fact the Ashcroft FIRST went to Sirius and XM and offered his services to FIGHT for the merger then, after not getting his price, went to the government side of the issue…

  • Neal Barkett

    Yes, I have Sirius sat radio and own stock in both sat. companies. And yes I hope the merger goes thru. But if doesn’t happen it won’t upset me as much as John Ashcroft’s selling off his previous job as Atty General of the United States! What the hell is going on? When is enough , enough??? All of Washington’s politicians are for sale. What happened to guys like Truman, Eisnhower or esp. Lincoln. Its not for the people by the people. It’s politicans thinking to themselves “Whats good for me by me”. I hope this backfires on the NAB by getting more democratic support because of thier hiring Ashcroft.
    P.S. Mel, Don’t give a song and dance. Make an honest case and stick to it. You have a good argument, stick to it. But most of all be clear and candid of what the format is that your proposing. Don’t be like a politician “Please”!