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 â€œseek[ing] a government bail-out to avoid competing in the marketplace.â€
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 â€” former attorney general John Ashcroft. He was a Republican senator from Missouri before his appointment by President Bush as the nationâ€™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