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Merger could still be years away

Most didn't give initial rumors of a merger between Sirius and XM much thought a short while ago. With regulators hinting they were unlikely to allow either company total control of the domestic satellite radio market, the issue seemed lost in space.

But Sirius Chief Financial Officer David Frear said this week that a merger with its rival would be a bonus to shareholders - and Standard & Poor's Equity Research said the prospects of a union with XM appear much more likely.

Why? According to Forbes, XM and Sirius are looking at slower retail growth and both companies have to devise a new plan to combat the mounting threat from iPods and other portable media players.

As earlier reported, Sirius cut its annual subscriber guidance to between 5.9 million and 6.1 million from its previous estimate of 6.3 million. That news came on the heels of two guidance cuts from XM, which begs why the two un- to barely-profitable companies are fighting with each other and other forms of entertainment for listeners.

S&P analyst Tuna Amobi said the situation gives both companies an argument to present to regulators and to Congress as to why their duopoly status needs to change. And, both XM and Sirius are hoping that the Federal Communications Commission will see the satellite radio service as part of a larger industry delivering music via mobile devices.

The likelihood of a merger, Amobi said, is around 40 percent and could still be years away.

Satellite Radio Programming Additions

Sluggish holiday retail sales may be expected from the two biggest satellite radio companies this year, but that's not stopping either from bolstering their programming offerings. This week, both XM and Sirius made moves to add big names to their programming ponds in an attempt to lure new subscribers and have a financially merry Christmas.

In light of the religious nature to the holiday season, Sirius and the Archdiocese of New York are teaming up for His Eminence Edward Cardinal Egan, Archbishop of New York to host his own one-hour weekly talk show. The Cardinal's program will air every Thursday from 12-1 p.m. ET throughout the year on Sirius' The Catholic Channel. In addition, Cardinal Egan will be one of the regular celebrants of the Mass broadcast each day on the channel.

As holiday goers are racing to get their shopping done on time, subscribers of XM will be happy to know that IndyCar Series hottie Danica Patrick is the latest racing superstar to join the company's on-air team. Patrick will co-host XM's The Andretti Green Racing Hour with AGR teammates Marco Andretti, Dario Franchitti, Bryan Herta and Tony Kanaan. The weekly one-hour show will debut next spring on sports talk XM channel 144.

And, as earlier reported, XM also became the official home satellite radio home of the 2007 Bowl Championship Series (BCS) National Championship Game and the other top college football bowl games this year.

www.SkyReport.com - used with permission
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