The Pacer

Issue date: 3/6/07 Section: Technology

Media Credit: Elizabeth Watts

Most people are familiar with satellite radio and the shows they broadcast that are not prevalent on local AM/FM radio stations.

However, the satellite radio industry is changing.

For months, the status of the two major satellite radio providers has been up in the air.

According to CNN.com, Sirius Satellite Radio and XM Radio, former rivals, have come to a consensus and are attempting to merge into one company. The merge will likely have an effect on the entertainment industry because it offers listeners a greater variety of programs.

"The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago," said Gary Parsons and Hugh Panero, executives of XM, in a joint statement.

As part of this deal, both companies will have their executives involved in leadership positions. XM Chairman Gary Parsons will be chairman of the combined firm, while Sirius' Mel Karmazin will assume the role of CEO. XM Chief Executive Hugh Panero will lead as CEO until the merger is completed.

However, there are other preparations that have to be made before the deal can go into effect.

Besides getting shareholder approval, XM Radio and Sirius Radio will have to get the endorsement of regulators, including the FCC.

It has also been said that as a condition of the merger, the Department of Justice might impose a price cap so the combined company cannot raise monthly subscription rates. Currently, both Sirius and XM have tiered-payment subscription packages, which start at $12.95 per month or $142.45 per year.

The new company would have a market value of roughly $13 million. The two companies, which have a combination of 14 million listeners, have not decided on a unified name or the location of the headquarters.

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