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Essay / Research Paper Abstract
In February 2007 it was announced there would be a merger between XM Satellite Radio Holdings Inc. and Sirius Satellite Radio. This 3 page paper examines at the financial motivation for the merger. The bibliography cites 3 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEsirius.rtf
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Unformatted sample text from the term paper:
XM Satellite Radio Holdings Inc. and Sirius Satellite Radio are rivals with a high level of cross over ion their target markets., They are also in a marketplace that is
in the growth stages; internet radio. This is a merger between equals, it is expected that the resulting company will have Mel Karmazin, the Sirius Chief as the new CEO
and XMs Gary Parsons as Chairman (Ellis and La Monica, 2007). The resulting firm will be owned in equal shares by Sirius and XM (Ellis and La Monica, 2007;
Los Angeles Times, 2007). The reasons behind the merger may be argued as driven by financial concerns. Karmazin sums up the drivers when he stated "We need to build
the subscription business base of satellite radio to strengthen our business and better leverage our high fixed costs" (Los Angeles Times, 2007).
These two radio stations are different, Siriuss success has partly been credited to the programming of the Shock Jock Howard Stern which is believed has helped to attract more
than 6 million subscribers (Ellis and La Monica, 2007). XM has also been successful in attracting listeners as the merged company will have in excess of 14 million subscribers
(Ellis and La Monica, 2007). However, these numbers have not been sufficient to increase the revenues to a profitable level. There are a number of financial benefits, in
any company there are a number of costs, many of these are fixed overheads and other are operating costs. Karmazin indicates that even with the 6 million subscribers the subscriber
base needs to increase in order to better the returns. The ability to merge with a similar company has a number of potential advantages. For a service where there are
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