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SiriusXM on Wednesday dismissed market rumors that the satellite radio giant is about to merge with Live Nation.
“I don’t have any comment on Live Nation. I don’t even know where that speculation is coming from. It’s not coming from SiriusXM,” CEO Jim Meyer said during an analyst call following the release of the company’s second-quarter earnings. Meyer added Sirius XM and Live Nation enjoyed “growing and strong cooperation,” not least as Live Nation president and CEO Michael Rapino sits in the SiriusXM boardroom.
“We both use assets we have to improve our businesses, but for me that’s about it,” Meyer said. SiriusXM CFO David Grear criticized a recent investment note from BTIG Research analyst Brandon Ross that predicted a merger between Live Nation and the satellite radio giant. “For me, I wake up in the morning and see a headline in a research piece and it’s a bit like going into the supermarket and seeing that Paul is dead, or a Sasquatch has sat down for candid photos, or aliens abducted someone’s baby. There’s lots of headlines, but it’s not certain they have much to do with reality,” Grear told analysts.
“We believe Liberty president and CEO, Greg Maffei, has long desired to combine Sirius and Live Nation into a single music distribution company and has encouraged a marriage of his two music industry interests in the past,” Ross had written.
The comments by top executives followed SiriusXM reporting that its second-quarter earnings rose as the satellite radio firm reached 33.5 million total subscribers.
The company, home of Howard Stern, saw quarterly earnings rise 45 percent to $292 million, compared with a year-ago profit of $202 million, in part thanks to one-time gains from its Pandora investment and tax savings. Earnings per share came in at 6 cents, in line with Wall Street analysts’ predictions.
Overall revenue was up 6 percent to $1.43 billion on higher subscriber, advertising and equipment revenues. Sirius XM added 483,000 self-pay subscribers during the latest quarter, up 4 percent from 466,000 self-pay customers added during the year-ago period.
“Sirius XM’s strong start to 2018 accelerated in the second quarter,” said CEO Jim Meyer. “We added 483,000 net new self-pay subscribers in the quarter with an impressive 1.6 percent self-pay churn rate, our best-ever performance.” He added: “We never rest in finding, acquiring and developing the best music, talk, entertainment, sports and comedy programming in all of audio.”
The satellite radio giant last week unveiled a deal with Netflix that will see the streaming giant create and launch a comedy-focused satellite radio channel, a move that sees Netflix extending its programming foothold beyond its online video roots.
“Comedy is important to us as a differentiator, and we know listeners love it as part of their bundle of diverse programming,” Meyer told analysts during a morning call when touting the Netflix partnership. The Sirius XM channel, dubbed Netflix Is a Joke Radio, is expected to launch in January 2019.
With Sirius XM installing its audio systems into most new cars, Meyer on the call also discussed the threat of U.S. tariffs on imported vehicles and auto parts, and what that could mean for the satellite radio giant. He told analysts car makers have called for “modifications” to the trade policy, but there were no signposts on what may follow.
“There’s a lot of noise on the trade front, and no one knows how that will work out, and where that will go,” Meyer said.
July 25, 8:45 a.m. Updated with comments by SiriusXM CEO Jim Meyer and CFO David Grear made during an analyst call.
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