Tuesday, March 25, 2008

DOJ Approves XM/Sirius Merger - How this will Hurt Public Radio?

It's all over the news, but Current gets the link for having a collection of links themselves. :-)

So yesterday the Dep't of Justice approved the XM/Sirius satellite radio merger. It still has to be approved by the FCC but don't expect them to deny it, not with Kevin Martin in charge. And expect Martin to ramrod it through before the election and his almost certain ouster (it's just a hunch, but I doubt McCain or Clinton/Obama will keep him around).

People can wax and wane all day about how this will or will not be good for consumers, for radio, and for media in general. I have only two specific points to make:

First, I really hope that, should this go through, it means they'll have home TEAM announcers for all the MLB baseball games, instead of just the home FIELD announcers. I'm not paying $14/month to listen to those horrid Yankees announcers when my beloved Red Sox are playing in the Bronx.

Second, I see no way this is not bad news for public radio...and in a very specific way: program licensing fees. Both XM and Sirius pay tidy sums to NPR, APM, PRI and dozen or so independent shows each year for the right to air their shows on the satellite "public radio" channels, like XMPR and NPR Now (on XM and Sirius, respectively).

A major factor in those tidy sums was each satradio operator trying to outbid the other to get the programming they deemed compelling enough to lure listeners to satellite radio.

I won't say which, but I have it on good authority (as in, from the guy who writes the budget) that a Top 10 Arbitron market NPR affiliate (i.e. one of the big ones that produces a few national shows that many other stations carry) was getting more revenue for their station from XM/Sirius programming fees than they were from NPR programming fees.

I'll say that again...XM/Sirius were paying this station MORE for the NPR programming than NPR itself was. That's a stunning statement...and indicative of perhaps how out of control the spending has been at XM & Sirius.

Discussions on best practices in business and budgeting aside, I have no doubt that many of these stations - and the networks themselves - have gotten used to those tidy sums padding their budgets. And I can almost guarantee you that at the next contract renewal, those tidy sums will be a lot less tidy. Why shouldn't they be? XM/Sirius knows damn well they overpaid for most of their content and now there's no other satradio operator to sell your wares to if one refuses to pony up.

So there it is in a nutshell - this merger actually is "bad" for public radio in a very real and tangible way.

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