Sirius CEO Karmazin, XM Chair Parsons Discuss Merger

Sirius’ Karmazin Discusses Possible Post-Merger Offerings

Sirius CEO Mel Karmazin participates in a Q&A with USA TODAY’s Laura Petrecca regarding his company’s pending merger with XM. When asked which programming from Sirius' content will be available on XM's service and vice versa, Karmazin said, “What we need to do in this period of time is to work with our content partners. Most of those contracts didn’t contemplate a combination.” When asked if the company will “offer any programming bundles or give subscribers more choices,” Karmazin said, “There could be a service that would have just the kids programming and music programming and not any of the more expensive programming. Baseball, the NFL and bigger talent –- such as Howard (Stern), Martha Stewart, and Oprah (Winfrey) –- could be on another service that maybe would be more expensive” (USA TODAY, 2/27). XM Chair Gary Parsons indicated that “big-ticket content deals” with MLB, Oprah and others are being “evaluated and such determinations [as to whether they need to be renegotiated] will be forthcoming.” He noted that “advertising revenue splits are usually involved, so content providers ought to embrace the notion of XM’s audience growing significantly by way of a combination with Sirius” (HOLLYWOOD REPORTER, 2/27).

LEAGUES LOSE LEVERAGE: In this week’s SPORTSBUSINESS JOURNAL, John Ourand writes the Sirius/XM merger could cost sports properties “hundreds of millions of dollars in lost rights fees” when their deals with the satellite radio companies expire and “they have to negotiate new ones without a bidding war between rivals.” RBC Capital Markets analyst David Bank: “In terms of negotiating leverage, the merger is certainly a negative for sports properties” (SPORTSBUSINESS JOURNAL, 2/26 issue).