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XM and Sirius To Merge: But What About Opie and Anthony?

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Yesterday on Howard Stern's show, Sirius CEO Mel Karmazin talked about the future for a merged satellite radio company. While he didn't say Opie's and Anthony's names directly, he might as well have. The topic of conversation turned to satellite radio programs that are on both regular radio and satellite radio. And the only show to make that move from satellite back to free radio is Opie and Anthony. It wasn't really all that cryptic a conversation. Karmazin went on to say that he did not understand the need or benefit of having satellite talent shared with the competition at free radio.

So what does that mean for Opie and Anthony and their future in a merged satellite world?

mel_karmazin_150.jpgFirst and foremost, it appears that if Karmazin has his way, the deal between Opie and Anthony and CBS will not be renewed. Karmazin has always been in lock-step with Howard Stern, and it is readily apparent from the Stern soundbites yesterday that Stern wants Opie and Anthony off of free radio completely. Certainly if the deal is good enough, Karmazin (a historically brilliant businessman) will find a way to follow the money, even if it means striking a deal with CBS.

Let's assume that he doesn't renew the deal with CBS. Does this mean awful things for Opie and Anthony? Not necessarily. If Karmazin turns down a deal with CBS, that means that he will be counting on being able to monetize Opie and Anthony's channel to a greater extent than the fees that CBS is paying to have them do three hours in the morning every day.

Let me try and paint a picture of what I think the future should be. And this assumes that the combined company can overcome the technical hurdles that they face going forward in combining services.

opieandanthony.jpgOpie and Anthony should keep their channel, and Howard Stern should keep both of his. Nothing else has to change. If Karmazin wants to pull Opie and Anthony off of free radio it will be his prerogative as the CEO of the new combined company. One thing that is certain, though, is that Opie and Anthony are one of the most valuable assets to XM today. There is no reason why they wouldn't be just as valuable as an asset to the combined company in the future. Mel and Howard may be buddies, and they may agree on a lot of things, but Mel also has to remain buddies with all the shareholders of the combined deal. That will include a large bloc of people who were shareholders of XM. Even Sirius shareholders will be looking to maximize value of the whole company. A strategy of maximizing the value of the company should never include alienating a large portion of the audience of one of the merging parts.

That should mean two things. Opie and Anthony will be able to do their show as they wish on their own channel handling their own programming. Opie and Anthony aren't as valuable an asset when they are handcuffed, but that doesn't meant that O&A aren't capable of seeing the big picture of a combined satellite future.

The quote from yesterday's Opie and Anthony show that is most instructive is from Greg "Opie" Hughes when he said,

"Mel knows if Howard leaves us alone, we leave him alone. Mel has always known that, but the problem was when Mel gave us the gag order, Howard was still able to say whatever the hell he wanted about us. That is where the real issue was."

This is as close to a concession as I have ever heard from Opie and Anthony. They obviously feel that they are somewhat backed into a corner, with the man who fired them previously, Mel Karmazin, at the helm of this new company. Their stance, when reduced to a single sentence, is "We have no problem respecting the new company and the new situation as long as we are shown the respect that we feel that we have earned."

I guess we will find out whether Karmazin feels that they have earned that respect if and when the merger is approved and as the consolidation begins. As one of the top assets on the XM platform, and after restarting their careers from ground zero, Opie and Anthony have done well to make the argument. The bottom line is that I don't think Mel Karmazin wants to find out just how many subscribers are tied directly to Opie and Anthony by counting them as they walk out the door, so expect a compromise of some kind. It is the best thing for the company and its shareholders.

And as funny as it may seem, as a beneficiary of stock success, it would be the best thing for Howard Stern.

(Disclosure: The author is an XM subscriber and a fan of Opie and Anthony, if you couldn't tell.)

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About Craig Lyndall

  • jack slap

    Nice review of yesterdays events.

  • Donnie D

    Opie & Anthony’s program on XM is available only by request. XM subscribers who want to listen, must call in to request access (at $1 additional charge.)

    When XM decided to share Opie & Anthony with CBS, only 35,000 total subscribers had signed up for Opie & Anthony. XM wasn’t benefitting from them.

    Now that they can be heard for free on terrestrial radio (CBS), XM has only 28,000 subscribers who are currently signed to hear Opie & Anthony.

    Mel Karmazin is a bottom line guy. He has no personal quarrel with Opie & Anthony. However, bringing in 29,000 subscribers will not save them from getting a much deserved boot out the door.

    Despite having a small band of loyal fans, these guys are lightweights.

  • http://www.filteringcraig.com FilteringCraig

    Donnie, you couldn’t possibly be more wrong, even if you started off your comment by saying that XM satellite radio doesn’t even exist.

    O&A have been off of the premium channel for over two years now. As for your other numbers, I am wondering where you read them, because they have never been published anywhere. That means you could have gotten them from an insider, or more likely given your blatant wrongedness already, you just made them up.

    To think that O&A only have 35,000 listeners on XM is just blatantly silly.

  • jack slap

    Donnie:

    Where the hell are you getting those numbers from? Opie and Anthony are #6 on talkers magazine heavy 100 and your old grandma stern is #12. Keep making up ridiculous numbers when we both know Opie and Anthony have millions more daily listeners than stern does. They are one of the top listened to channels at XM, who has millions more subs than sirius. They are syndicated to over 20 large FM markets and they are on Direct TV and they are mentioned in every article about the merger. Please get a grip on reality.

  • Poote Genous

    Stern is the Drive.
    Stern is the Buzz.
    Stern is creating content.
    Stern is what it’s all about.
    XM users should thank their lucky Stars.
    Sirius is better.

  • hi

    Stern had lots of listeners 20 years ago. Now he is old and just sits there flopping his dentures around for $100 million a year.

  • butpud

    I used to love stern but its been a long while since he was even remotely relevant. O and A are much funnier and enormously more interesting to the average person listening to the radio this generation. Oh yeah- no you dont need a premium channel to hear them on XM. O and A are part of the normal subscription on channel 202. Just another example of the mis-information stern and his fans like to spew.

  • Rob

    Wow, they let anyone blog nowadays.

    Opie and Anthony get terrible ratings. Hardly anyone listens to them. Stern is the most listened to program on Sirius and if they merge with XM he will be the most listened to on XM as well. Opie and Anthony’s ratings were so bad on XM they had to also go back on free radio. Pathetic!! Now they are on a local free radio station here in my city. They are not even in the top 10 ratings.

  • ssnake

    The rating system is not geared to measure ratings when they are shared across both FM and Sat, so the numbers coming from arbitron are incorrect. O&A get nearly the same listeners as Howard does as validated by the management of XM and Sirius.
    I bought XM because O&A were on it, no other reason. I also listened to Howard because he was still on FM. I got the best of both worlds. I hope the two Sat companies merge so I get the choice again.
    It doesn’t have to be one or the other. They could both do very well and make lots of people laugh and make themselves lots of $$.
    It would be a big mistake to underestimate either one.

  • Doctor Negel

    I think the amount of listeners that canceled their XM subscriptions when the homeless charlie incident happened should be a pretty clear message to everybody involved what would happen if the merger resulted in O and A being terminated.

  • Billy P.
  • http://filteringcraig.com Craig Lyndall

    This report by Arbitron is completely false.

    When someone fills out a diary, they might put Howard Stern as the person they listen to. Then that is applied to Sirius.

    If someone listens to Opie and Anthony where does that get applied?

    Well, if it is in a market that has Opie and Anthony syndicated on regular radio, then it gets applied to regular radio.

    The bottom line is this. Only the people within the corporations of XM and Sirius know how many people listen to Howard and Opie and Anthony. I am sure Howard is in the lead, but don’t think for a second that there are only 217,000 listeners to Opie and Anthony on XM. It is mathematically stupid to think that.

  • http://theugliestamerican.blogspot.com Andy Marsh

    I have XM and one of the reasons I bought XM instead of Sirius is because I did not want to put money in HS’s pockets. I think he’s a pompous ass! I stopped listening to him years ago when his radio program became nothing but an advertisement for his movie. I don’t find him funny at all! What’s funny about listening to some guy get women to strip on radio?!??!

    The other primary reason I went with XM is because they offer better radios. I have one radio that goes from my car to my house to my pocket and works equally as well in any of those locations. It doubles as an MP3 player, I can record what I’m listening to at the time and I can set it up to find artists or songs. I can also set it up to record programs in advance. I currently have around 200 songs loaded on it and no warnings that I’m running out of space any time soon. I put a CD in my computer when my XM is hooked up to it and it automatically converts the CD to MP3s and loads it on my receiver.

    The bottom line is that XM has more subscribers, period! Who gives a shit what channel they’re listening to? You pay the monthly fee, regardless. And whoever said that there’s an extra fee for any channel on XM needs to put the crack pipe down, this is satellite radio not satellite TV, not yet anyway…

  • Steve Moore

    Howard Stern OWNS O&A

    Thanks for coming out.

    Enjoy your CENSORED O&A shows since the lameness will not be renewed after the merger.

  • http://filteringcraig.com Craig Lyndall

    Anything is possible, Steve, but I am guessing that Opie and Anthony are big enough for XM that Sirius won’t risk alienating their audience. As I said, anything is possible, but it seems to me that the new company will be big enough for the two biggest non-sports talk shows aimed at males in the entire country.

  • jack london

    O&A aren’t going anywhere douche.

  • Al

    Who gives a crap who is better than who. I’m just happy I can get NFL on my XM and NFL on my Sirius. This merger is going to be great for the industry.

    Also Andy… Sirius has the exact same thing. It’s called the Stiletto.

  • Al

    Who gives a crap who is better than who. I’m just happy I can get NFL on my XM and NFL on my Sirius. This merger is going to be great for the industry.

    Also Andy… Sirius has the exact same thing. It’s called the Stiletto.

  • The Man

    Opie and Anthony fans are delusional. If they were so valuable XM wouldn’t be going under right now.

  • jimbo

    ah, guys … Not only has it been confirmed that O&A will be on Sirius, it has also been confirmed that Howard will be on XM. Official announcement by end of month. Btw, unofficial subs for each service (they both obfuscate) before merger was complete = 8M for xm and 6M for sirius. O&A listenership pegged at just north of 1.5M. Howard at approx 1M. These are “listening live” numbers and satellite only.

  • rob

    what a waste of time and life arguing about what shows better, if you like O&A listen to them , and if you like Howard listen to him, the problem is each set of fans always are so insecure and egotistical about the show they listen to and go on pointless egotistical rants of why their shows better, im sure and would hope you got better shit to do with your life then argue about a radio show you listen to