SBD/29/Sports Media

NEWS CORP.-ECHOSTAR DEAL ON HOLD DUE TO DECODER DISPUTE

          Rupert Murdoch's $1B bid to purchase EchoStar
     Communications and turn ASkyB into a "satellite power" is
     running into "heavy weather," according to Brooks Boliek of
     the HOLLYWOOD REPORTER.  Murdoch's News Corp. and EchoStar
     delayed their applications for regulatory approval "because
     there are disagreements that remain to be worked out."  By
     combining EchoStar and ASkyB, News Corp.'s satellite TV
     business, Murdoch "hoped to create a deep-pocketed No. 3
     competitor to industry leaders DirecTV and Primestar." 
     EchoStar, in a release: "There can be no assurance that News
     Corp. will proceed with an investment in EchoStar."  News
     Corp. spokesperson Jim Platt: "There won't be any filings
     until we have certain business issues resolved" (HOLLYWOOD
     REPORTER, 4/29).  In N.Y., Mark Landler notes the "sticking
     point" is that EchoStar does not plan to equip its
     subscribers will a satellite decoder system made by News
     Corp.  EchoStar "was told" that unless it "dropped" its
     system in favor of News Corp.'s, the investment would be
     cancelled (N.Y. TIMES, 4/29).  In D.C., Paul Farhi notes
     speculation that Murdoch and EchoStar CEO Charlie Ergen
     "were fighting over control" or that Murdoch "was having
     second thoughts about the financial commitment," which could
     reach up to $5B over several years (WASHINGTON POST, 4/29).
          TC-BYE-BYE? The TIMES' Landler notes a source who said
     that Murdoch might be seeking to "swap partners" from
     EchoStar to TCI Inc., which has a 21% stake in Primestar. 
     But pulling out of the EchoStar deal "could prove costly,"
     since terms call for News Corp. to purchase $200M worth of
     EchoStar shares or to invest $200M in the company, "if the
     transaction does not close by May 1" (N.Y. TIMES, 4/29).
          PRIMED FOR BATTLE: Primestar is "putting the finishing
     touches on a major reorganization" designed to help cable
     companies challenge rivals such as DirecTV and EchoStar,
     according to USA TODAY's David Lieberman.  Under the new
     arrangement, Primestar, the No. 2 satellite provider, would
     be transformed into a unified company with a national
     pricing and marketing plan.  Primestar would be "folded
     into" TCI Satellite Entertainment.  TCI would own about 38%
     of the equity; Time Warner about 30% (USA TODAY, 4/29).

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