Karmazin Denies Merger Talks, Says Sat Radio To Top Sat TV/Cable

NEW YORK — Despite a published report that Sirius and XM Satellite Radio are in talks for a merger between the companies, both Sirius and XM denied discussions.

Sirius' CEO Mel Karmazin said during a financial conference call, “I've been with the company for about eight weeks and this is the third rumor with which I've been confronted. The other company that was mentioned — I have not met with the chairman, I have not met with the CEO, so I have no idea where this came from.” The report about a merger with XM was from a story in the January 26 issue of the New York Post.

A spokesman for XM Satellite Radio stated, “While XM does not comment on rumors, Hugh Panero, president and CEO of XM has never met with Mr. Karmazin.”

Sirius announced on the same day widening losses that fell below analysts forecasts, but said that subscriber acquisitions are exceeding company expectations, causing Sirius to revise upward its subscriber forecasts for the year.

Sirius changed its guidance to 1.4 million new subscribers forecast for this year. It now expects to reach 2.5 million subscribers by the close of 2005, up from the 2 million predicted only weeks ago.

Sirius said the higher expectations are based “on a spillover effect in new activations” in January, referring to continued activations resulting from holiday sales.

Karmazin said satellite radio as a format is rapidly gaining validity and should eventually surpass satellite TV and cable TV combined.

“We strongly believe that the satellite radio market is even larger than most forecasts,” said Karmazin, adding, “There are 109 million households, 3 million heavy trucks, 3 million RVs, 16 million new cars coming out of the factory every year and 200 million cars on the road. Satellite TV and cable is in approximately 90 million homes. Satellite radio could and should be even bigger than

When asked if there were additional deals on the horizon as large in scope financially as that with Howard Stern or the NFL, Sirius said, “I don't know what would happen if Oprah decided to leave TV and wanted to come to Sirius. But there is nothing on our list today that would be of the scope of Howard Stern, the NFL or Major League Baseball,” said a spokesman.

Sirius also announced that it will broadcast NBA regular season games, playoffs and the finals nationwide to subscribers as part of a non-exclusive multiyear extension agreement with the National Basketball Association (NBA).

Although it already broadcasts 40 NBA games each week, Sirius now will receive expanded trademark and promotional rights. Also, subscribers will receive live official courtside game stats on their Sirius radio displays, Sirius said.