Sirius Off to the Races

When you've got only two satellite radio providers, exclusive deals are about landing prized content as much as they are about keeping them away from your lone rival. So when Sirius Satellite Radio (NASDAQ:SIRI) announced that it would be inheriting the NASCAR broadcasting contract from XM Satellite Radio (NASDAQ:XMSR) come 2007, it was all about adding to its arsenal while subtracting from its larger competitor's portfolio of offerings.

If you don't think that XM is smarting, take a peek under the hood. While its original deal with NASCAR was signed five years ago, auto racing had grown so popular on XM that the network launched a second 24-hour NASCAR channel a few months ago.

The timing of the announcement couldn't have been any better given the gripping final laps at the Daytona 500 over the weekend. More importantly, because Sirius is still the smaller service charging 30% more, it helps justify the value proposition when satellite radio buyers come to that fork in the road to decide between the two services.

Between the NFL and Howard Stern, Sirius was already well-positioned in popular ear magnets. But after XM put up the funds to land major league baseball, it was clear that this friendly game of land grab had turned into a different card game -- War.

Sure, in the end, a lot of us may wind up signing up for both satellite radio services. It's not just the exclusive content. Each company has some really exciting things in the works, like XM with its guided traffic premium offering and Sirius teaming up with Microsoft (NASDAQ:MSFT) to provide video content to its radio subscribers. While the providers are looking to have more than 8 million subscribers signed up by the end of the year, it may not be long before you see a fair share of overlap there.

That would certainly be good news to investors in both companies, as costly new content deals seem to be pushing the goal of free cash flow further and further away. It's like the Daytona 500 becoming the Daytona 501 -- then 502 -- and so on. Yet for both companies, the race for the checkered flag is real. There is little time left for getting chatty with the pit crew.

Tune into some of these other revved-up yet related stories:

• Ask yourself whether Sirius is a Rule Breaker.
• If you think Sirius won't eventually lap XM in new subs, tell me I'm wrong.
• Talk shop with sharp Fools who know the sector well in the XM discussion board.

Longtime Fool contributor Rick Munarriz thinks it's cool that Sirius broadcasts The Motley Fool Radio Show four times over the weekend. He does not own shares in any of the companies mentioned in this story.The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.