Fairness Doctrine oportunity?

I try to avoid taking a position on political matters, because as I've said before, you run the risk of alienating half your clients. This is one, however, that goes to the heart of capitalism and free market principles as well as free speech and freedom of choice, so I am afraid that my somewhat Libertarian tendencies might show through in my analysis. But please bear with me and forgive me if I gore your Ox.

I remember when the Fairness Doctrine was in place. It essentially said that anyone that uses the public airways, must program equal time for both sides of any political commentary. If I remember correctly, it was very unwieldy, highly subjective and extremely unpopular with the conservatives and they believed that it was anything but fair. To prove this last point I present to you Ronald Reagan who, promptly upon taking office, did away with it. Fast forward to Barak Obama and democratic majorities in both houses and you guessed it, there is renewed interest in reestablishing this doctrine with an eye bent squarely at conservative talk radio.

If this occurs Talk radio as we know it today may become history. Some of you might be saying so what? or who cares? The answer is that WE care. Remember we are here to make money.

This is not about politics.

Yes, I think it is more of big brother getting involved in more peoples lives, I think it is Government meddling in the free markets and it worries me to think about who is going to be judging what speech is liberal and what is conservative. All that aside let's take a look at the investment potential here.

The conservative side of the argument goes something like this. Liberal talk radio has failed in just about every AM market out there. The demographics are such that people who tend to listen to talk radio tend to be more conservative. They believe that liberal political speech, can't compete in this particular market. If the government mandates equal time for the opposing view, there is the fear that listeners will turn off the radio during the liberal hours and that the stations will loose advertising revenue and thus move completely away from the talk radio format to another format that is still working. Bottom line is revenue.

The question is, will this really happen? and the answer is I don't know. But here is what I do know, "buy the rumor sell the news".
If the above scenario plays itself out here's how the speculation goes; If the radio stations begin to change formats, away from talk radio, these syndicated talk shows will make adjustments. They are big business. Big, profitable business. They will simply migrate to the Internet and satellite radio. The fairness doctrine can't touch them there. Remember that it is only the fact that they are using the "public airways" that gives the government any control over them.
So here's what I am going to do; Since I can't figure out a vulnerable position on the Internet side of this equation, I'll be buying Sirius Satellite, symbol SIRI. I'll be using risk capital(money that I can afford to loose) and I'll be establishing a very small position. If I do get some upward movement in the stock price, I'll take profits early but maybe leave a little on the table just to see what happens.
This is a 16 cent stock that trades at a negative P/E ratio, the company has a legal monopoly on satellite radio and that means zero competition and they have been beaten badly lately.
As far as I know, no one else has made this connection from an investing perspective and maybe no one else will, but if I can't have a little fun and take a wild speculation every now and then, then why bother with this stock market stuff anyway?
So know this, I am not recommending this trade, I'm just sharing my intentions with you.
Good luck and Godspeed

JT


Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.