Obviously not willing to wait around and find out his fate, XM Satellite Radio Holdings (XMSR) CEO Hugh Panero has decided to leave in August before the final decision on whether XM and Sirius (SIRI) will be allowed to merge. In an announcement XM said that president and COO Nate Davis will step into the position on an interim basis.
While Panero knew if the two companies merged he would be out, the thought of waiting while that decison was being waited for wasn't a good career move. It would have made him look weak to other potential suitors in the future.
In a statement concerning the announcement he's leaving, XM said, "After building XM into one of the fastest growing new entertainment services and with the anticipated close of the merger late this year, Hugh decided this was a good time for him to step aside."
While the idea that the two could be cleared to merge has been given better odds lately, it's still really a stretch to think that it will happen.
He left because he was basically a lame duck, and the company already - through their actions - let him know what they thought. If the merger were to go through, Sirius CEO Mel Karmazin would head the new company.
All the hoopla about the potential merger has really taken the eye off of the horrible performance and way these companies have been built. Merger or not they're going to be in trouble for a long time because of their poor judgement in signing celebrity talkers far beyond what they could afford to pay them. Those contracts aren't going away any time soon on either side.
Karmazin has provided plans that allegedly address the concerns of the merged companies by offering a la carte packages of radio channels. While that addresses legitimate concerns, it doesn't do anything to as far as the long term and what may do.
If the poor financial managing of the companies result in contiuous losses, they'll either go bankrupt or have to raise prices. What options will regulators have at that time? They'll have to let them go under or raise prices.
I think regulators shouldn't allow the merger and rather allow the free market to take care of the rest. The companies have been terribly run from the beginning and have no one to blame but themselves. Offering even lower prices may placate regulators, but it would hurt the companies in the long run. They don't have room to cut profits and margins for the sole purpose of merging.
This has been a fiasco with both companies from the beginning. There's no reason to encourage them to keep on by bringing two poorly run companies under one roof. To me the only decision is for regulators to say no and let the chips fall where they may.
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