ISC/MRN getting much less from SiriusXM for rights this year


Now that Sirius and XM have merged into a single entity, we’re starting to see the effects of a monopoly on rights fees paid for content. Here’s a good example: International Speedway Corporation (ISC) and its Motor Racing Network, which distributes NASCAR programming, has told investors it received $8 million in rights and related satellite radio broadcast fees last year for Sirius XM’s use of its Motor Racing Network. But under the new contract, the company writes that they expect to receive substantially less (MRN also airs on 700 terrestrial stations).

From ISC’s Q4 release: “For 2011, the industry earned approximately $17.0 million of total ancillary rights fees of which the Company received approximately $8.0 million in ancillary rights fees and related satellite radio broadcast fees, or approximately $0.10 per diluted share.   For 2012, the Company expects to earn an immaterial amount of ancillary revenue. 

Even so, ISC will still make its racing and talk content coverage available on SiriusXM: “Since the merger of Sirius Satellite Radio and XM Satellite Radio there is now only one satellite provider, SiriusXM Radio, bidding on the distribution rights for original programming.  As a result, distribution rights agreements entered into by SiriusXM Radio for original programming subsequent to the merger have generally been lower.  This is the case with the agreement NASCAR recently executed for SiriusXM Radio to continue as the exclusive satellite rights provider for NASCAR.  The sport and its tens of millions of fans will benefit from the continuation of this developing distribution channel, but the future revenue will be less.”

RBR-TVBR observation: We get that since there is one less satellite radio provider out there to pay out rights and content fees, content providers will be hurt to a degree. But the point is since SiriusXM is now the only satellite provider out there, they can negotiate from a much stronger position. The onus has now been placed on content providers to compete for getting on SiriusXM by offering lower rates, not the other way around, where Sirius and XM competed for carrying content by offering sweeter deals to these same providers.