Thursday, May 24, 2007

Senator Kohl's Comments Defy Logic (Something's Rotten...)

I'm sure that Kohl has more conflicts of interest. I'm just getting started.

Below (in bold) are excerpts from Senator Kohl's statement (The Wall Street Journal) followed by my comments:

"The combined firm would have the ability to raise prices to consumers, who will have no choice but to accept the price increase,"

Obviously, if the combined satellite radio company raised prices, consumers could cancel service as an option, and go back to listening to free AM/FM or HD radio.

The senator said that satellite radio was nationally based, nearly commercial free, of a better audio quality than traditional over-the-air radio, and offers a wider selection of channels. For all these reasons, Sen. Kohl said, he had concluded it was distinct from other forms of radio and audio entertainment.

Because terrestrial radio has poor quality sound (even though they have had access to digital technology for years), limited selection (due to payola restraints) and is loaded with commercials (so the station owners can maximize profits), satellite radio should not be penalized. Terrestrial could improve sound quality by spending to upgrade to HD (which they are aggressively doing, finally), succomb less to payola (which limits selection of content) and pack fewer commercial minutes per hour.

Kohl claims that he can't be bought because he is so rich, but how do you think he got rich?
Logic leads me to believe that there most be some motivation to issue these inaccurate statements against the merger.

So after a bit of research, I found that Herb Kohl is the President/Director of the Milwaukee Bucks Basketball team, and has a significant financial stake. The Bucks buy air time on terrestrial radio. Sirius content includes the NBA. Those listeners having access would more than double with a merger. What would happen if all those WTMJ listeners had an option?

Bucks to sell ads for radio
The Business Journal of Milwaukee - January 19, 2007
The Milwaukee Bucks will assume full responsibility for advertising sales on their radio broadcasts and buy the air time for their games that run on WTMJ-AM (620) beginning with the 2007-2008 season.
The Bucks and WTMJ management began informing their staffs and advertisers of the new arrangement Jan. 17 as part of a new broadcasting contract.
Until now, the Bucks and WTMJ both sold commercial time and sponsorships on the broadcasts and shared the revenue.
WTMJ general manager Jon Schweitzer and Bucks vice president of business operations John Steinmiller declined to comment on the reason for the change or the duration of the new contract.
Steinmiller said the Bucks hope to increase their broadcast revenue under the new deal. link: here