Chris Blount
06-03-04, 06:50 AM
DirecTV and the National Rural Telecommunications Cooperative agreed to end NRTC's exclusive sale of the satellite TV service in rural areas, the entities announced Wednesday.
The move further clouded the future of Pegasus, which controls NRTC affiliates with about 1.1 million DirecTV customers. Pegasus said it wasn't aware of the deal, which it was reviewing Wednesday, but added that it doesn't think the company's agreements can be terminated.
DirecTV said through the new deal NRTC's separate agreements for sale of the satellite TV service with its members and affiliates - including Pegasus Satellite Television - have been terminated, effective Aug. 31. DirecTV said it will to allow NRTC members to participate as non-exclusive retailers and service providers, or through another option NRTC members can deal directly with the satellite TV company and become exclusive DirecTV resellers through 2011.
As for Pegasus, DirecTV said Wednesday it made a cash offer to the company - payable in either a lump sum or monthly payments - if Pegasus agrees to an orderly transfer of its subscribers to DirecTV before Aug. 31. "While neither the NRTC nor DirecTV has an obligation to Pegasus on account of the termination of its contracts, DirecTV has extended an offer that we believe is fair and reasonable," said Steve Cox, executive vice president of sales, distribution and business development at DirecTV.
In a separate statement, Pegasus Satellite Television President Ted Lodge said the company is evaluating the notice purporting to terminate its agreements and the related cash offer. He said the company received the notice and offer Wednesday morning with no prior notification.
He also hinted Pegasus may challenge the deal. "We categorically reject DirecTV's and NRTC's assertion that they can terminate our agreements, and intend to vigorously protect our rights," he said. "We believe the strong arm tactics demonstrated by these actions further evidence both the true value of our assets and the very strong desire of DirecTV and NRTC to take value away from our stakeholders."
In a Securities and Exchange Commission filing, DirecTV said any payment to Pegasus would amount to about $750 million.
DirecTV praised the NRTC deal. "We are excited about this new chapter in DirecTV's business, which will allow us to cohesively market our service to consumers in NRTC territories and to incrementally expand our owned-and-operated subscriber base," Cox said.
Said NRTC President and CEO Bob Phillips, "This is a classic win-win situation for NRTC's members and DirecTV. NRTC's members will be able to realize value from the businesses that they have so successfully built over the last decade while DirecTV will be able to retain NRTC's member base as part of its new national retail network."
http://www.skyreport.com (Used with permission)
The move further clouded the future of Pegasus, which controls NRTC affiliates with about 1.1 million DirecTV customers. Pegasus said it wasn't aware of the deal, which it was reviewing Wednesday, but added that it doesn't think the company's agreements can be terminated.
DirecTV said through the new deal NRTC's separate agreements for sale of the satellite TV service with its members and affiliates - including Pegasus Satellite Television - have been terminated, effective Aug. 31. DirecTV said it will to allow NRTC members to participate as non-exclusive retailers and service providers, or through another option NRTC members can deal directly with the satellite TV company and become exclusive DirecTV resellers through 2011.
As for Pegasus, DirecTV said Wednesday it made a cash offer to the company - payable in either a lump sum or monthly payments - if Pegasus agrees to an orderly transfer of its subscribers to DirecTV before Aug. 31. "While neither the NRTC nor DirecTV has an obligation to Pegasus on account of the termination of its contracts, DirecTV has extended an offer that we believe is fair and reasonable," said Steve Cox, executive vice president of sales, distribution and business development at DirecTV.
In a separate statement, Pegasus Satellite Television President Ted Lodge said the company is evaluating the notice purporting to terminate its agreements and the related cash offer. He said the company received the notice and offer Wednesday morning with no prior notification.
He also hinted Pegasus may challenge the deal. "We categorically reject DirecTV's and NRTC's assertion that they can terminate our agreements, and intend to vigorously protect our rights," he said. "We believe the strong arm tactics demonstrated by these actions further evidence both the true value of our assets and the very strong desire of DirecTV and NRTC to take value away from our stakeholders."
In a Securities and Exchange Commission filing, DirecTV said any payment to Pegasus would amount to about $750 million.
DirecTV praised the NRTC deal. "We are excited about this new chapter in DirecTV's business, which will allow us to cohesively market our service to consumers in NRTC territories and to incrementally expand our owned-and-operated subscriber base," Cox said.
Said NRTC President and CEO Bob Phillips, "This is a classic win-win situation for NRTC's members and DirecTV. NRTC's members will be able to realize value from the businesses that they have so successfully built over the last decade while DirecTV will be able to retain NRTC's member base as part of its new national retail network."
http://www.skyreport.com (Used with permission)