By: spaghetti48236
12 Apr 2007, 08:57 PM EDT
Msg. 156611 of 156628
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Satellite Jump Could Be Tough
At first glance, Imus' most obvious move now would appear to be a jump to satellite radio, as Stern did when he tired of the hefty fines imposed by the Federal Communications Commission. However, experts said Thursday that they doubt Imus could make a similar move anytime soon.
"(Sirius Chairman) Mel Karmazin was godfather to Imus as he was to Howard Stern," Cooke said. "But right now, Mel is trying to roll a boulder up a mountain by asking the FCC for a pass on (Sirius' merger with XM Satellite Radio). And his opposition, the National Association of Broadcasters, has made Stern the poster child for why the merger shouldn't be allowed. This is just the worst possible time for Imus to pull this."
XM Satellite Radio Holdings Inc. (XMSR) is in the same bind should it try to pursue a suddenly available Imus, Cooke said.
Sirius reached a pact earlier this year to acquire XM in a $13.6 billion deal, but the proposed deal has received heavy scrutiny from Congress, and some have expressed doubt that it will receive regulatory approval because, in some sense, it would add up to a satellite-radio monopoly. XM and Sirius argue that they compete with all forms of audio entertainment - not just with each other or with AM/FM radio - and therefore the merger would not harm competition.
Karmazin has pointed out that racier content like that on the Stern program could be on a separate tier where it would be removed from easy access by children and more sensitive adults. Still, an Imus signing while the companies are trying to make their merger's case to regulators and others could result in negative publicity that would be a significant detriment.
Perhaps a more fundamental obstacle to an Imus-to-satellite deal is that both XM and Sirius, having spent wildly to compete with each other in recent years, may not be in a financial position to take on another big contract, said Ed Seeger, president of radio brokerage firm American Media Services. Both companies are losing millions of dollars each year.
"What I do see is maybe another cable network offering to pick Imus up," said Seeger. "If I were running one of them, I would certainly consider it."
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