DirecTV and Sirius XM Will Not Merge

Liberty Media, DirecTV’s parent company, has announced that it will not be offering satellite TV subscriptions in a bundle with Sirius XM’s satellite radio service at this time. After saving Sirius XM from bankruptcy last week, Liberty Media now holds a large stake in the satellite radio company.

To rescue the satellite radio company from potential bankruptcy, Liberty Media offered Sirius XM $530 in loans in exchange for a 40% stake in the company.

According to Chief Executive of Liberty Media Greg Maffei, bundling DirecTV subscriptions with Sirius XM services may be an “opportunity down the road.” Yesterday, Maffei told analysts that the “great dream” is that Sirius Satellite Radio and XM Satellite Radio, the acquisition of XM by Sirius, may combine services. This merger would provide subscribers with 150 channels, and it would free up 12.5MHz for mobile video.

“That’s down the road and highly speculative,” stated Maffei, suggesting that this venture may present video quality issues. Maffei said that a merger of this nature on the Sirius XM spectrum would rest at “the intersection where Sirius XM and DirecTV reside.”

During a conference call, Maffei also told analysts that he would consider bundling Sirius XM with an $80 DirecTV subscription. In regards to bundled packages, he stated, “I think those are things we’ve talked about … something Mel [Karmazin, Sirius XM CEO] is enthused about … I hope we will be able to proceed on these.”

Liberty Media’s DirecTV currently offers select Sirius channels in its satellite TV packages, including two Sirius channels in the basic family subscription.

During the fourth quarter, Liberty Media’s revenue increased at two of its key business units. Including Liberty Media’s stake in Starz Entertainment and DirecTV, the company saw a 26% increase in revenue to $360 million.