Sat radio merger raises hackles
XM's Parsons parries b'cast association's 'jihad' jabThe National Association of Broadcasters was the target of unusually harsh public repudiation Wednesday over its efforts to thwart a planned merger of the satellite radio companies.
XM Satellite Radio chairman Gary Parsons compared NAB's lobbying of lawmakers to a jihad and wondered why traditional radio execs dismiss pay radio as having limited appeal while simultaneously spending vast sums of money — through NAB — to try and stop XM from merging with Sirius.
"They clearly view it as competition and, candidly, they should," Parsons told attendees of the Goldman Sachs Communacopia conference in New York. "I've been a bit surprised about the raw magnitude of the dollars they have spent and the somewhat visceral nature of the jihad against the merger going forward."
Parsons' comments came the same day that UBS Investment Research analyst Lucas Binder downgraded Sirius Satellite Radio and XM to "neutral" after having upgraded them to "buy" in April.
Binder said there is a 50-50 chance that regulators will approve the merger. If they do not, XM might fall 29% and Sirius 19%, the analyst said. If the merger goes through, he estimates the upside for XM is 33% and 23% for Sirius.
XM shares sunk 5.5% on Wednesday to $14, while Sirius shares were off 4.3% to $3.35. They were the top two losers on The Hollywood Reporter Showbiz 50 index.
Responding to comments made by Parsons, NAB spokesman Kris Jones said that NAB has recently spent $4 million on lobbying and communications efforts, but not all of it was related to the XM-Sirius merger. Some, for example, went to fight reinstatement of the so-called fairness doctrine, to lobby in favor of self-regulation in regards to indecency; and to educate consumers on the transition to digital TV scheduled for February 2009.
"A monopolist will say and do anything to get their monopoly," Jones said of Parsons' remarks at the conference.
Parsons said he has been surprised at the varied entities that have lobbied in support of the merger, including Christian and minority groups and the American Trucking Assn. Those groups and others have argued that a merger would lead to a financially strengthened satellite radio industry that would ensure a home for niche radio programming.