SiriusXM’s Pandora acquisition brings the online radio player closer to Live Nation – but might another acquisition be in the works?
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SiriusXM’s Pandora acquisition brings the online radio player closer to Live Nation – but might another acquisition be in the works?

Satellite radio broadcaster SiriusXM has just acquired Pandora (a major streaming radio platform) for $3.5 billion. Industry voices claim this acquisition has created the “world’s largest audio entertainment company,” and note that it positions Pandora much closer to Live Nation. The reason for this new closeness is that Liberty Media Group (which owns 71% of SiriusXM) owns 34% of Live Nation already – could these companies be brought even closer together by more M&A activity in the near future?<?p>

Live Nation’s share price has risen by 27% so far this year

graph 2709 sirius

SOURCE: Yahoo Finance

The possibility of further acquisitions is certainly on some analysts’ minds. One such analyst is Brandon Ross, with BTIG. In a recent note, he wrote: "We continue to believe Sirius' controlling shareholder, Liberty Media Corporation, wishes to eventually control a combined SiriusXM, Pandora and Live Nation, and that this will become reality with a Sirius acquisition of Live Nation and a clean-up of Sirius' share structure."

Ross has speculated on this kind of deal previously. As early as June 2016, he suggested that a combination of SiriusXM, Pandora, and Live Nation “could act as a powerful end-to-end music distribution platform from live music to streaming music and radio.”

Following a call on Monday, Ross asked SiriusXM CEO Jim Meyer directly about the possibility. Meyer’s response was that he’s “done the math”, and his business “certainly has the firepower” but that further deals are “not on my mind right now”. Still, that’s not a no.

As to the regulations surrounding such a deal, everything is speculative at the moment. David Lowery, a music business lecturer at the University of Georgia and founder of a number of alt-rock bands, said: “This could be anti-competitive in the concert industry – or not. For instance, my bands enjoy significant SiriusXM play. Cross-promotion could enhance revenues of many mid-tier artists. But honestly that’s an unknown.”

Disclosure

Dominion holds Live Nation in its Global Trends Luxury Fund.


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