XM, Sirius Fight Red Tape for Their Survival

XM Satellite Radio (XMSR - commentary - Cramer's Take) and Sirius (SIRI - commentary - Cramer's Take) keep getting new life, and the FCC keeps snuffing out that new life.

The numbers this morning and yesterday for XM are truly extraordinary, with excellent subscriber growth -- most cable companies would kill for 322,000 net new subs -- and a fantastic churn of 1.67% vs. 1.84%, and a much smaller loss. This business is really kicking butt. I know, it doesn't seem that it matters because of the Democrats' votes against it. There is no new news here, but nobody seems to realize that. We aren't any closer or further than we were last month.

At the same time, of course, the money is the answer, not the votes. XM needs to raise money, lots of money, $400 million in senior notes, in part to buy back other debt. That's a bummer, because the whole point of the merger is to bring down costs, refinance debt and make it so the two competitors become a strong alternative to terrestrial radio. I reiterate that if there is no deal, this company will have a hard time making it in its current form, and the senior note holders will most likely be the winners.

Meanwhile, last week, one of the FCC's objectors, Jonathan Adelstein, talked about what he needed to happen: a six-year freeze on prices. That stretches out the profits for the combined company for an awfully long time and takes the big gains right off the table. As it is, three years is a lifetime. Still, any movement by the dissenters to the deal means a deal is that much closer, and, again, without a deal, there's just not enough here for these common stocks to have much of a stake if the two companies remain competitive.

I reiterate that bankruptcy is an option without a deal, for one or both. If someone can tell me how that is in the interest of the country, I am all ears. The companies simply have to come together for a serious alternative to terrestrial radio. The commission acts as if we don't need one, as, despite these better-than-expected losses because of the decline in car builds, the companies still need a deal. The longer they wait, the less it even matters anymore.

Random musings: Yahoo! (YHOO - commentary - Cramer's Take) makes people want to rethink the Web. I said yesterday that people got overly negative. I am a buyer of Yahoo! ... Washington Mutual (WM - commentary - Cramer's Take) has new lift, but remember, this one always had deep pockets if it needed them.

At the time of publication, Cramer had no positions in stocks mentioned.

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