A Slight Delay

The US Department of Justice has approved, in principle, the merger of XM Sattelite Radio and Sirius. Full approval from the DOJ is expected to come in a few weeks’ time, at which point the matter will be taken up by the FCC.

For all intents and purposes, this means that the merger is a done deal. According to Bloomberg:

FCC Chairman Kevin Martin said last week that his agency would “go forward quickly” after the Justice Department ruled. Mary Diamond, a spokeswoman for the FCC, said yesterday the commission “is looking at” the transaction.

The FCC has not, historically, bucked the judgment of Justice, and is even less likely to do so given its more recent history of approving media mergers of all stripes.

Whether the Department, or the Commission, should approve the merger is still open to debate, not that it’s likely to be debated. Stocks of both companies at first traded up since news of the DOJ approval, only to fall soon thereafter; they’ll likely trade better still once the inevitable wave of layoffs follows the merger. The hundreds of employees likely to be put out of work completely aside (and no, that wasn’t intended to be as callous as it sounded), there are other factors which would tend to make this a lousy idea. (more…)