Expenses outpace revenue for company
Red ink is flowing at XM Satellite Radio on the eve of its proposed merger with Sirius Satellite Radio as expenses grew faster than revenue during the third quarter.
Washington, D.C.-based XM saw losses for the quarter ended Sept. 30 widen to $145.4 million from $85.5 million a year earlier.
Revenue rose 20% to $287.5 million, and the satcaster added 315,000 new subscribers, bringing its total to 8.6 million, up from 7.2 million last year.
The Federal Communications Commission is expected to rule any day on the proposed acquisition of XM by Gotham-based Sirius Satellite Radio. Among XM’s expenses for the quarter were $500,000 spent on lobbying for the deal and $8 million paid to outgoing CEO Hugh Panero.
“We remain optimistic that our deal to merge with Sirius will close by the end of this year,” said chief exec Nate Davis in a statement.
Sirius CEO Mel Karmazin will be chief executive of the joint company if the merger is approved.
Arbitron recently released its first ratings data on satellite radio. It showed that Sirius’ $500 million man, Howard Stern, is indeed the king of satellite radio with 1.2 million weekly listeners — the biggest such aud on satellite but a fraction of the more than 8 million weekly listeners he had on terrestrial radio before he left CBS in 2005.
But since Sirius signed Stern, it has closed what was a wide subscriber gap with XM. At the end of its most recent quarter, Sirius had just over 7 million subscribers.
The second most-popular satellite radio station, according to Arbitron, was XM’s Top 20 on 20, with just over 1 million weekly listeners.
XM shares closed down 25¢, or 1.6%, to $15.34 on Thursday.