There has been a lot of buzz lately in regards to the possibilty of SIRIUS Satellite Radio (Nasdaq : SIRI) merging or buying out XM Satellite Radio (Nasdaq : XMSR). Most of the talk is due to lower than expected subscribers for both companies, and XM growth slowing down. Sirius CEO Karmazin has even been quoted as saying that “mergers often lead to creating shareholder value.” I am sure that he is under a lot of pressure from shareholders to turn the company out of its losses and finally turn a profit. He has also stated in the past that he would want to merge with XM, but it would be a regulatory problem. However, more recently, he has stated that the regulatory should not be a problem anymore. By the sounds of things, he seems as though a merger could happen. Whatever happens though, it should make for an exciting story.

I’m just not sure I see the benefits of decreased competition. On the one hand, with a combined company they would have all the sports leagues all on one platform, as well as all the bigger named talent like Howard Stern and Oprah. I think that the merger would have a negative impact on the assets that are already up in the sky. Since with one network they wouldn’t need to have that many satellite up in there. Also, I’m not sure how the satellites will interact with each other, since XM’s satellites are currently in geostationary orbit while Sirius are elliptical geosynchronous orbits. I have a feeling that if the merger did happen, we could see the possibility of moving a couple of those satellites over another market, such as Europe, to increase their business. Also with the increased bandwidth available, it will be interesting to see if they increase the quality on individual channels or if they just increase the total number of channels. I know that Sirius had been talking about adding cartoons to their service in the future, with the increased bandwidth they could probably be able to do that. As of right now, all this talk is just rumours and nothing substantial has come into play. Be on the lookout since a merger would happen quickly.