The New Sirius XM Radio: Good News For Sports Fans

Mergers don’t always have to resemble an episode of The Hills with Carl Icahn starring instead of Lauren Conrad. Often mergers benefit the companies and its customers. Such success could have been found in the recently approved acquisition of XM Radio by Sirius.

Since satellite radio took off in 2001 the two rivals have battled back and forth to be the leader in sports radio programming. But due to licensing agreements the sports audience was split: XM landed exclusive rights to MLB, PGA and Sirius had broadcasting rights to NASCAR, the NFL and the NBA. Add to that the fact that both companies used different transmission technologies meaning that customers had their hands forced and you get one divided customer base. Sports fans were frustrated that they couldn’t switch back and forth between the gridiron and the diamond.

Sirius looked to solve these issues with their $3.3 billion dollar acquisition of XM. But the deal was almost struck down by federal regulators. Consumer advocates and traditional radio stations contended that the merger amounted to a monopoly. Ultimately it took the FCC sixteen months and a narrow 3-2 vote to approve the deal and pave the way to a technology that will deliver sports content with greater continuity.

In the fall the new company will offer an array of attractive packages that will certainly be an improvement over the days of old. Fans will be able to choose one of three options: a new “Best of Both Worlds” option that combines each companies programming for $16.99 per month, an à la carte menu that allows users to choose 50 channels from Sirius/XM for $6.99 per month, or users can keep either the old XM or Sirius lineups for $12.95 per month. Now fans will have much more freedom in selecting their programming.

But not all is in the clear. Because of the acquisition Sirius now carries $3.4 billion in corporate debt. They also are facing increasing assaults from new technologies such as the iPhone and streaming radio stations found online. Nevertheless, this merger should give consumers greater control and choice over their programming. This usually turns out to be a good thing.