Sirius and XM merger

Yesterday, in my marketing class, we discussed an article that was printed in the wall street journal. The article discussed a possible merger of Sirius and XM radio. The merger is estimated at 11.4 billion dollars and would be structured as a fifty-fifty merger, with CEO of Sirius, Mel Karmazin, to serve as the CEO of the company after the merger. The satellite radio industry began in 1997, but just recently has been growing and both companies both have debts, which combined amount to 2.3 billion dollars. The federal communications commission, FCC, says that the companies can not merge because these two companies are the only companies to offer satellite radio in the United States, which would make the satellite company a monopoly after the merger. There is debate whether or not the merger will happen and if they would legally be able to merge the two companies. Both companies are in debt because of the high startup costs involved, however they may believe that without competition they can begin making profits. We discussed, in class, the reason the satellite companies will or will not succeed. Satellite radio charges 12.95 per month and is coming standard in new vehicles, but they are competing against free radio. It all depends on what people want. Satellite radio has more stations, it is uncensored, and no advertisements when listening to music. It is unclear whether or not the merger will go through and for how long until the satellite companies actually start making profits. Only time will tell!