XM-Sirius: Finally?

Finally, a marriage of XM and Sirius Satellite Radio?

Almost.

Federal Communications Commission Chairman Kevin Martin on Sunday announced his support for the Sirius-XM merger.

But a nod from Martin isn’t enough to seal the deal. Even as chairman, his vote is still only worth one of the three needed to make a combined Sirius -XM happen. So where will the other two yeas comes from?

Not from the two Democrats who sit on the Commission, Cramer said. Both Michael J. Copps and Jonathan S. Adelstein have concerns about the merger.

That leaves two Republicans. One of them, Robert M. McDowell, doesn’t seem to agree with the biggest objection to the deal – that the new company would be anti-competitive. The way he sees it the radio market is made up of satellite and terrestrial airwaves, Apple iPods and even CDs. So McDowell is a “likely yes,” Cramer said.

The wildcard here is Deborah Taylor Tate. If you follow Cramer’s logic, it all comes down to her. Tate’s a Republican, so there’s good reason to think she’ll vote yea – but there’s no guarantee.

A thumbs-down from Tate, Cramer said, would mean “at least one of these companies will go under – probably XM.”

But Tate’s approval puts Sirius CEO Mel Karmazin in position to solve some major problems caused by competition with XM.

The auto manufacturers and show personalities have been playing one satellite company off the other, driving up costs for both XM and Sirius. A combined firm would put an end to that.

The biggest of all benefits, though – at least for the short term – is in the refinancing. Instead of competing for much-needed funds to keep their respective businesses alive, the new Sirius-XM can offer Wall Street a good bond deal, Cramer said, that’s virtually worry-free of default.

Investors looking for a quick trade – other than a decent bump if a deal’s announced – will be disappointed. There’s no quick way to monetize the two combined companies. But over the long term, this should be a terrific play.

“I’m betting this goes through,” Cramer said, “and I maintain that together Sirius and XM will be a powerhouse.”

Questions for Cramer?

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