The Competitive Enterprise Institute‘s Wayne Crews and GMU Econ grad student Ryan Young clearly explain why a merger of Sirius and XM poses no threat to consumers — but would make life more onerous for the merged-company’s competitors. Here’s one of their key insights:
A big reason Sirius and XM want to merge is that they stand to save
hundreds of million dollars in costs (Oprah and Howard Stern are
expensive). Those savings will make satellite radio more competitive.
That competitive challenge is precisely why traditional over-the-air
broadcasters launched a fierce lobbying and advertising campaign
opposing the merger.
Why complain if a rival’s merger will result in that competitor
charging higher prices and degrading its services? A harmful merger
would be cheered. Competitors’ opposition reliably signifies that a
merger will benefit consumers.
