Nick
09-18-06, 08:46 AM
Once ranked high among the high-tech growth stocks of the late '90s and early
'00s, recently DBS shares have taken the roller coaster ride of regulatory and
industry uncertainty.
Much talk of late about mergers, new alliances, stock swaps, top management
changes and more aggressive competition from telcos and cablecos in the once-
wonderful world of Direct Broadcast Satellite. All this buzz has financial analysts
hoisting the storm warnings of uncertainty and issuing cautionary advice to their
investors.
So, what is the average satellite subscriber to think of the apparent turmoil in the
industry that delivers his coveted multi-channel tv programming from the sky Much
is being written about the recent goings on, but one astute observer, Evie Haskell
of MediaBiz.com has captured the essence of this once blooming industry and she
seems to be of the opinion that this rose, by any measure, still smells like a rose.
SkyBOX: Dr. Malone's DirecTV?
by Evie Haskell
Now there's an interesting thought.
It came to light this past Friday via various reports that Rupert Murdoch might be
eyeing a switcheroo with Dr. John Malone: Malone's 19 percent of News Corp for
Rupe's 38.3 percent investment in (and presumably control of) DirecTV plus a
couple billion dollars or so.
Immediately the hounds of news and finance began to bray; the downfall of DBS
formed the most common melody. In fact, by day's end, Malone's Liberty Media,
DirecTV and EchoStar's DISH had all lost ground in the markets. News Corp had
moved up.
So is this Armageddon for the dish crowd?
Well, it's hardly a sign of continuing confidence on Mr. Murdoch's side. And to be
sure, DBS has come under a great deal of pressure lately as new-and-improved
cable services eat into subscriber gains. (The numbers are still growing... just a
good bit more slowly and at greater cost to the sky guys.) But it also strikes us
as a natural outgrowth of the Murdoch crew's consistent bumbling with DirecTV,
to say nothing of the aging media magician's desire to keep News Corp firmly
under his family rule.
Since waging a long campaign to gain control of DirecTV, the Murdoch team
seemed to kick their prize into a corner, using it as little more than a stalking
horse for other Murdoch ambitions. Local retailers found themselves facing a
bizarre new array of restrictions and stipulations with we-can-sell-it-best-
ourselves forming the most common theme. The fabulous DVR offerings of TiVo
were given short shrift in favor of News Corp-owned NDS, which then was
promptly late, later and latest with its product. News Corp appointed DirecTV
senior execs made it quickly apparent that they were too grand to actually talk to
people within the industry. And all the sizzle that Eddy Hartenstein had brought
to a company owned by an ever-stodgy GM began to leak out in a long, slow
passing of gas.
So were we surprised to hear that Murdoch may ditch his erstwhile prize? Not
really. Do we think Malone might do better by DirecTV? Well, the good doctor isn't
exactly famed for pouring heart, soul and money into operations. High finance
and deal making are more his game - not to mention the arcane tax implications
favorable for both. Which suggests that Malone might get his hands on DirecTV,
then turn around to forge it into a combo with, say, an AT&T or Verizon. And since
DirecTV is, despite the News Corp tenure, still a fabulous service... and since the
telcos are more than a bit anxious to get into the video game... that could be very
interesting indeed.
www.SkyReport.com - used with permission
'00s, recently DBS shares have taken the roller coaster ride of regulatory and
industry uncertainty.
Much talk of late about mergers, new alliances, stock swaps, top management
changes and more aggressive competition from telcos and cablecos in the once-
wonderful world of Direct Broadcast Satellite. All this buzz has financial analysts
hoisting the storm warnings of uncertainty and issuing cautionary advice to their
investors.
So, what is the average satellite subscriber to think of the apparent turmoil in the
industry that delivers his coveted multi-channel tv programming from the sky Much
is being written about the recent goings on, but one astute observer, Evie Haskell
of MediaBiz.com has captured the essence of this once blooming industry and she
seems to be of the opinion that this rose, by any measure, still smells like a rose.
SkyBOX: Dr. Malone's DirecTV?
by Evie Haskell
Now there's an interesting thought.
It came to light this past Friday via various reports that Rupert Murdoch might be
eyeing a switcheroo with Dr. John Malone: Malone's 19 percent of News Corp for
Rupe's 38.3 percent investment in (and presumably control of) DirecTV plus a
couple billion dollars or so.
Immediately the hounds of news and finance began to bray; the downfall of DBS
formed the most common melody. In fact, by day's end, Malone's Liberty Media,
DirecTV and EchoStar's DISH had all lost ground in the markets. News Corp had
moved up.
So is this Armageddon for the dish crowd?
Well, it's hardly a sign of continuing confidence on Mr. Murdoch's side. And to be
sure, DBS has come under a great deal of pressure lately as new-and-improved
cable services eat into subscriber gains. (The numbers are still growing... just a
good bit more slowly and at greater cost to the sky guys.) But it also strikes us
as a natural outgrowth of the Murdoch crew's consistent bumbling with DirecTV,
to say nothing of the aging media magician's desire to keep News Corp firmly
under his family rule.
Since waging a long campaign to gain control of DirecTV, the Murdoch team
seemed to kick their prize into a corner, using it as little more than a stalking
horse for other Murdoch ambitions. Local retailers found themselves facing a
bizarre new array of restrictions and stipulations with we-can-sell-it-best-
ourselves forming the most common theme. The fabulous DVR offerings of TiVo
were given short shrift in favor of News Corp-owned NDS, which then was
promptly late, later and latest with its product. News Corp appointed DirecTV
senior execs made it quickly apparent that they were too grand to actually talk to
people within the industry. And all the sizzle that Eddy Hartenstein had brought
to a company owned by an ever-stodgy GM began to leak out in a long, slow
passing of gas.
So were we surprised to hear that Murdoch may ditch his erstwhile prize? Not
really. Do we think Malone might do better by DirecTV? Well, the good doctor isn't
exactly famed for pouring heart, soul and money into operations. High finance
and deal making are more his game - not to mention the arcane tax implications
favorable for both. Which suggests that Malone might get his hands on DirecTV,
then turn around to forge it into a combo with, say, an AT&T or Verizon. And since
DirecTV is, despite the News Corp tenure, still a fabulous service... and since the
telcos are more than a bit anxious to get into the video game... that could be very
interesting indeed.
www.SkyReport.com - used with permission