This deal is like teeter-totter: it's looking good, it's not looking good, it's looking good, it's not looking good. Gosh, this is all so dramatic.
Washington - Seventy-two members of Congress expressed opposition to the merger of Sirius and XM in a letter to the Justice Department, the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC).
The six paragraph letter stated the merger of Sirius and XM would create a monopoly that would harm consumers and in it they claimed there is “scant evidence” that a merger would produce any cost savings to subscribers.
XM, Sirius and even Wall Street analysts have asserted the merger would create a savings of $3 billion to $7 billion for the companies. Sirius CEO Mel Karmazin, in testimony before Congress, has said the savings would be passed on to consumers in the form of lower prices and increased programming.
The six paragraph letter stated the merger of Sirius and XM would create a monopoly that would harm consumers and in it they claimed there is “scant evidence” that a merger would produce any cost savings to subscribers.
XM, Sirius and even Wall Street analysts have asserted the merger would create a savings of $3 billion to $7 billion for the companies. Sirius CEO Mel Karmazin, in testimony before Congress, has said the savings would be passed on to consumers in the form of lower prices and increased programming.
The lesson here is not that analysts scoff at Mel Karmazin's convenient fiction that a combined entity would cost consumers less, it's that both companies need to seriously increase their political campaign contributions if they want Congress to smile on the proposed deal.
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