Steve Mehs
01-22-03, 04:20 AM
A frenzy of speculation broke out Tuesday on word that executives from EchoStar have - gasp! - spoken to execs at News Corp. and Liberty Media about a possible sale of the company.
Gee. What a surprise.
As anyone who's watched Charlie Ergen for any length of time knows, he's always ready to talk deals. Upsides, downsides and inside out. So the notion that he might be on the phone with Rupert Murdoch or John Malone, or both, hardly comes as a big shock. Besides, at this particular moment, we believe Charlie has at least three potential reasons for holding such discussions:
If there's a big pot of money out there, ready to buy into DBS (as via a Hughes transaction), Charlie would quite naturally like to get his hands on it. Take the money and run is not necessarily a bad business strategy.
In our observations of Mr. Ergen, he loves nothing more than winning. In his book, winners usually implies losers and his favorite pick for that role is Hughes Electronics. If he can get in there and mess up the deal for Hughes, do you really think he wouldn't do it?
With the Hughes/EchoStar merger dead, and cable geared up for a better competitive fight, EchoStar's long-time, low-ball strategy is looking a tad risky. All those subs bought with cheap equipment and special programming deals pose a fairly high potential for churn. So back to our No. 1: Take the money and run could be a pretty good option.
Of course, most observers doubt that any serious discussions have yet been held between Ergen and potential buyers. Besides, the real question is whether News Corp. would have anything to do with Ergen, who has repeatedly outfoxed the Fox boss, Rupert Murdoch. Speculation on the Street, in fact, suggests that the whole "Charlie's gonna sell" story was started by News Corp. partisans seeking to get Hughes to the table.
Said William Kidd, satellite analyst with Lehman Brothers, "We believe that it remains an unlikely scenario in which EchoStar is sold. Rather, we feel the more likely situation may be posturing on the part of GM, News Corp. and Liberty about whether or not GM gets a premium for its GMH stake." Hmmm...
From SkyReport (http://www.skyreport.com/skyreport/jan2003/012203.shtm#one) (Used with Permission)
Gee. What a surprise.
As anyone who's watched Charlie Ergen for any length of time knows, he's always ready to talk deals. Upsides, downsides and inside out. So the notion that he might be on the phone with Rupert Murdoch or John Malone, or both, hardly comes as a big shock. Besides, at this particular moment, we believe Charlie has at least three potential reasons for holding such discussions:
If there's a big pot of money out there, ready to buy into DBS (as via a Hughes transaction), Charlie would quite naturally like to get his hands on it. Take the money and run is not necessarily a bad business strategy.
In our observations of Mr. Ergen, he loves nothing more than winning. In his book, winners usually implies losers and his favorite pick for that role is Hughes Electronics. If he can get in there and mess up the deal for Hughes, do you really think he wouldn't do it?
With the Hughes/EchoStar merger dead, and cable geared up for a better competitive fight, EchoStar's long-time, low-ball strategy is looking a tad risky. All those subs bought with cheap equipment and special programming deals pose a fairly high potential for churn. So back to our No. 1: Take the money and run could be a pretty good option.
Of course, most observers doubt that any serious discussions have yet been held between Ergen and potential buyers. Besides, the real question is whether News Corp. would have anything to do with Ergen, who has repeatedly outfoxed the Fox boss, Rupert Murdoch. Speculation on the Street, in fact, suggests that the whole "Charlie's gonna sell" story was started by News Corp. partisans seeking to get Hughes to the table.
Said William Kidd, satellite analyst with Lehman Brothers, "We believe that it remains an unlikely scenario in which EchoStar is sold. Rather, we feel the more likely situation may be posturing on the part of GM, News Corp. and Liberty about whether or not GM gets a premium for its GMH stake." Hmmm...
From SkyReport (http://www.skyreport.com/skyreport/jan2003/012203.shtm#one) (Used with Permission)