New York — On the eve of the Federal Communication Commission’s (FCC) soft deadline for a ruling on the satellite radio merger, Sirius Satellite Radio executive VP and chief financial officer David Frear said he gives the merger better than a 50 percent chance of approval.
Frear added, “We’re still optimistic we’ll get that approval soon and we’ll close the transaction by the end of the year.”
Sirius and XM await rulings on their proposed merger by the Department of Justice (DoJ) and the FCC, the latter of which is one day shy of its informal deadline for reaching a decision. The FCC sets a 180-day “informal” clock to rule on such cases. The last day of that clock is Dec. 5.
Since Sirius and XM announced their intent to merge in February, Frear said, “We went through four congressional hearings … and the chairmen of the committees did not step in and seek to stop the good work of the FCC and the Department of Justice.” He continued, “No new issues came up in the public comment period and that is good news. There’s little work left of the DoJ to do. They have the 6 million pages and have had a chance to review them,” referring to the documents given to the agency at its request.
In the event the companies merge, there will likely be some scaling back in management. “Mel hasn’t picked a management team yet. I’m auditioning here,” quipped the Sirius chief financial officer. Sirius CEO Mel Karmazin would be CEO of the merged company.
Frear stated further, “There is precious little opposition to the merger other than the [National Association of Broadcasters].”
When asked if the deal was not approved, would Sirius and XM find ways to work together to find synergies and eliminate expenses, Frear said, “That is conceivable. It’s not something we’ve addressed. We feel the merger should get approved and it has better than a 50-50 shot.”