SiriusXM’s Purchase of Pandora Has Analysts Wondering

SiriusXM’s acquisition of Pandora, a $3.5 billion deal announced last week, could just be the beginning of the satellite radio giant’s ambitions, speculates Rolling Stone magazine.

For years, Wall Street analysts have been speculating if the company might join forces with live events powerhouse Live Nation Entertainment, which also owns Ticketmaster — and the likelihood of that seems to have ticked up after its Pandora purchase.

There are a few key points to suggest SiriusXM’s interest in Live Nation:

• The two companies are both under the umbrella of mass media giant Liberty Media, which owns 34 percent of Live Nation and 72 percent of SiriusXM
• Liberty’s CEO Greg Maffei is the chairman of both; as music-streaming services continue to force competition in the industry, a merger between the two groups could create one lucrative music distribution company that controls several different access points for fans in the music market. Liberty Media has also made plays in the past for radio broadcasting giant iHeartMedia, suggesting Maffei’s interest in marrying major music companies together. 
• With SiriusXM now in control of Pandora, the company’s fusion with a second big player with advertising power and brand relationships may be a natural course

“SiriusXM and Pandora has merit, but Live Nation completes the puzzle,” BTIG Research analyst Brandon Ross — who has called the merger of the two companies “inevitable” for two years and said this summer that investors increasingly believe it to be as well — wrote in a note last week. Pandora and Live Nation have “numerous synergies” between them, he said, such as the potential to leverage the former’s large platform and sponsorship strengths for marketing and promotion of tours. Ross also pointed out that SiriusXM’s all-stock financing in its Pandora deal makes little sense for a company with such “cash firepower,” and that “perhaps Sirius is saving that cash for an eventual cash component to a Live Nation deal.”

But for now, any merger or acquisition talks are just speculation.