TheStreet.com TV Recap: XM, Sirius Are Buys

Why the satellite stocks look good.
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As Sirius (SIRI) - Get Report and XM (XMSR) jockey to get their proposed merger approved, both stocks are buys, said Jim Cramer on Wednesday afternoon.

On

CNBC's

Stop Trading!, Cramer said a merger will allow the combined company to raise prices and to stop wasting money bidding against each other for on-air talent. "I just think it's great," he said. He notes that he prefers Sirius, but that XM also looks good here.

On the regulatory approval side of the equation, Cramer expanded on the deal's prospects on Wednesday's edition of Wall St. Confidential video on TheStreet.com TV.

Cramer said Kevin Martin, the chairman of the Federal Communications Commission, "has greenlighted this deal even though he's been subtly saying it needs regulatory approval," Cramer said. But it does not need approval from the anticompetitive side because of both free radio and, more importantly,

Apple's

(AAPL) - Get Report

iPod product, which people can use to listen to music in the car, he explained.

Discussing another megamerger, the deal between

Warner Music

(WMG) - Get Report

and EMI should get past U.S. regulators, but might have a problem getting past European regulators, Cramer said.

"Europe doesn't seem to understand the desire or need to have companies be saved," he told Gregg Greenberg, the host of Wall St. Confidential. "This is a deal that must happen to preserve the music business."

Europeans don't look at mergers the way the U.S. does, Cramer went on to say. "The problem is they don't look at what the companies need to have done; they look at what the consumer needs to have done."

And it is because of this consumer focus, "which is so not in sync with what we do," that he believes the deal will get blocked. Moreover, as Warner Music does not have a diversified entertainment business, Cramer feels that if its music division doesn't do well, its library will "decline in value virtually every hour."

Greenberg mentioned that New York Gov. Eliot Spitzer announced Tuesday that the St. Regis Mohawks could build a casino in the Catskills, and asked what it means for New York and Atlantic City.

"Eliot has made it a priority to develop everything but New York City

because he thinks New York City will take care of itself," Cramer responded. "He is not going to block anything that creates jobs in other parts of the state."

Further, he said he believes this is a "direct threat" to

Trump Entertainment

(TRMP)

because it takes three hours to drive to Atlantic City from New York City, whereas it takes an hour and a half to get to the Catskills.

Although he said he loves the management at Trump, Cramer said it would struggle with such direct competition.

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

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