Deals and IPOs

Sirius' Karmazin: XM Merger Would Serve 'The Public Interest'

In an interview on CNBC, Sirius Satellite Radio President and Chief Executive Mel Karmazin said the proposed merger with XM Satellite Radio is not anti-competitive -- and serves the public interest.

Executives at XM Satellite Radio andSirius Satellite Radio released details of pricing plans Monday that would allow customers to choose which channels they want to receive -- if the two firms are permitted to merge.

The U.S.' two major satellite radio companies announced the merger, then valued at $4.7 billion, last February. The combination of the companies requires approval from antitrust regulators and the Federal Communications Commission.

Karmazin pointed to CNBC’s own reportage on the proliferation of media, including “terrestrial radio, HD radio, iPhones, iPods and all of the other competition” that a merged Sirius-XM would face, as proof that no monopoly could result from a merger.

“We don’t believe that two satellite radio companies -- that together have 3.4% of the national [U.S.] audience –- combining is anti-competitive."

CNBC’s Erin Burnett noted that the CEO was using figures that included free AM and FM radio broadcasters among the competition.

“Our definition of the public interest,” Karmazin explained, “is that [the merger] will result in more choice and lower prices for consumers.”

“We’ve announced that we’re going to deliver a first: a la carte programming. That means someone who wants a subscription can get a [monthly] subscription for $6.99 -– a 46 percent reduction as a result of this merger. They’ll be able to pick and choose content.”

The pricing plans announced Monday range from $6.99 per month for 50 channels from either Sirius or XM, to a $16.99 per month subscription, which would allow customers to keep their existing service and cherry-pick channels from the other provider's service.

That means a customer could listen to Major League Baseball games on XM and tune in to National Football League games on Sirius on the same radio.

Currently, the price of a monthly subscription for both companies is $12.95 and there is no "a la carte" option to choose individual channels.

A hybrid of Sirius and XM faces steep regulatory challenges, however: When the companies received their licenses from the FCC to begin offering subscription radio service via satellite, they agreed not to merge.

But in the years hence, the firms argue, the aural entertainment market has broadened with the addition of digital technology and downloadable music on portable devices like iPods.

Consumer groups and the National Association of Broadcasters oppose the proposed merger. The two companies hope to close the deal later this year.