Will Howard Stern find true love with Opie & Anthony? That's just one of the questions being asked as their employers -- orbital broadcasters Sirius and XM -- announced plans for a corporate marriage Monday.
Rumors had flown once before that arch-foes XM Satellite Radio and Sirius Satellite Radio -- the pay-radio industry's No. 1 and No. 2 players, respectively -- would merge. After all, they provide similar products, spanning Americana roots music, sports coverage, Christian rock -- and, of course, uncensored airings of Stern and his derivative rivals on the Opie & Anthony Show. And both firms are in the same economic boat, more or less: each had spent itself deeper into the red (especially with massive pay and stock deals for "zoo show" draws like "Howard" and "O&A") in its attempts to lure more subscribers -- as the once-upon-a-time "next big thing," satellite radio, looked less and less ahead of the curve.
But XM chief executive Hugh Panero and Sirius CEO Mel Karmazin, Stern's previous boss when both were at Viacom, scoffed at combination speculation -- and both execs are the sort of mavericks who'd never submit to a coalition.
Until Monday, that is, when economics outweighed vision and ego, and the firms said they'd seek to merge. Immediately, analysts started debating whether the U.S. Federal Communications Commission would permit the deal -- which would create a virtual monopoly, far overwhelming the industry's other tiny and nearly invisible players.
But Blair Levin, managing director at Stifel Nicolaus -- and former chief of staff at the FCC -- told CNBC's Liz Claman he is "cautiously optimistic" that the merger will be approved. Why? Levin pointed out that since the firms' inceptions, the overall media landscape has evolved "dramatically," with new technologies that actually render an XM-Sirius hybrid non-monopolistic. Levin named Apple's iPod, Verizon Wireless' V Cast subscriber service and Qualcomm's MediaFLO as just a few of the de facto competitors in the digital audio market.
Tuna Amobi, senior media and entertainment analyst at Standard & Poor's, disagrees. He says the "current composition" of the Congress is more prone to regulation; and he opines that he "cannot believe" the FCC would OK the merger. Tuesday's enthusiastic market response, Amobi declares, is "overconfident." And in the end, the analyst says he "doubts if there's a benefit" for consumers in a Sirius-XM fusion.
Of course, M&A buffs know that dubious benefits never stopped Time Warner and AOL, or the creation of DaimlerChrysler.