Long wait for satellite radio deal may end soon

As the regulatory review drags on, the company is struggling to add enough new listeners to cover its massive operating costs, and slumping automobile sales further dim future prospects. Analysts say lobbying by traditional broadcasters opposed to the deal is one reason the regulatory review is taking so long.

XM is struggling with higher borrowing costs and reported a wider loss in its most recent quarter. The company recently refinanced $400 million of its debt at a much higher interest rate and borrowed another $100 million just last month. That's on top of $1.6 billion in existing debt.

Both companies say they could continue to operate separately if the deal is shot down, but XM would likely face a much tougher time refinancing its debt on its own.

Approval of the transaction would be a defeat for the National Association of Broadcasters, which represents traditional radio stations and has lobbied heavily against the deal. But the NAB may take some satisfaction from delaying regulatory approval beyond what many analysts expected.

The two companies announced the all-stock deal worth $4.7 billion in February 2007, but its value has declined along with Sirius' stock price and is now worth $2.8 billion.

The Justice Department cleared the deal in March. But the Federal Communications Commission, which aims to complete its reviews in 180 days, isn't done yet, about 400 days since the companies' formal request.

"The process appears to be broken," said Ken Ferree, a former chief of the commission's media bureau. The FCC's 180-day target has become "meaningless," he said.

Sirius Chief Executive Mel Karmazin expressed annoyance at the government's pace in a conference call with analysts in May. The companies had initially hoped to secure government approval by the end of last year.

"We share the reasonable frustration that many of our investors feel, regarding the time it has taken," he said. "I am optimistic that we are getting close to the finish line, and will be able to close the deal."