Why do Sirius and XM want to merge?
Both companies have been losing money, with combined losses in 2005 of $1.5 billion. While they have yet to turn a profit, the companies have been engaged in a talent acquisition war to attract listeners. Sirius signed a five-year contract worth $500 million, plus bonuses, to broadcast a morning show with popular shock-jock radio personality Howard Stern in 2004. Not long after, XM signed an 11-year, $650 million contract to broadcast Major League Baseball. The company also has a three-year, $55 million deal with television talk show host Oprah Winfrey. By combining efforts, the companies hope to stem their losses and help the market grow.
