Merger DEAD?

[Scott Greczkowski]

The New York times is reporting that the Justice Department will rule against the merger of Echostar and DirecTV!

http://www.nytimes.com/2002/09/24/business/24MERG.html

I am sure we will be hearing much more about this over the next few days!

[James_F]

Don't tease me like that Scott! :D

[Corey140]

Justice Dept. Staff Said to Be Opposing Satellite TV Merger
By STEPHEN LABATON


ASHINGTON, Sept. 23 — Staff members of the Justice Department have recommended that the government block the proposed $11.2 billion merger of the two largest satellite television broadcasters, DirecTV and EchoStar, because it would be anticompetitive, lawyers involved in the review said today.

If approved by Charles A. James, the head of the antitrust division, the decision would be a major victory for Rupert Murdoch, chairman of the News Corporation, who had sought unsuccessfully to buy DirecTV.


WOOHOO!!!!!!

[Scott Greczkowski]

Drudge Report is now reporting the same thing

DISH IN PLAY? ONE FOR MURDOCH: DEPT OF JUSTICE STAFF SAID TO OPPOSE ECHOSTAR-DIRECTV MERGER... Recommended gov block proposed $11 billion merger of two largest satellite television broadcasters; it would be anticompetitive, NYT set to report later Monday night, newsroom sources tell DRUDGE. Murdoch had sought unsuccessfully to buy DirecTV... MORE...

(Unfortunately there is no more even though it says more)

[Scott Greczkowski]

Normally I don't put much weight in the Drudge Reports, but The New York times hold a lot of water.

The question is what does Charlie do now? He has spent the last year spending all his time on the merger, feeling it was a sure thing.

Now it seems likely that the merger will not be approved.

I wonder what Echostar stock will look like tommorow?

[Richard King]

Drudge is simply quoting the NYT, so his report is only as relable as the NYT report. I suspect it is true though.
I wonder what Echostar stock will look like tommorow?I would think it will be up because of all the now freed up cash they have on hand. The first thing he should do is attempt to buy back the Vivendi investment at a greatly reduced price tag. It seems pretty obvious because of the price spread between DISH and GMH that the market has not expected the merger to work out for some time.

[Mike123abc]

Well I hope they make the decision either way public soon. I hate all this limbo that the industry is in waiting on an announcement.

[SParker]

Not that I am saying Dish/DTV should of merged but if they then go ahead and allow AT&T and comcast merge they will show just how pro-cable they are.

[Scott Greczkowski]

The thing of it is the Justice Department NEVER approved the AT&T / Comcast merger.

According to the DOJ they are still investigating the merger and have not made their decission yet.

[James_F]

What a minute here... Do we have something DBS to talk about here??? :hurah:

[SParker]

If Rupert tried to swoop in he would have to go through this whole process too wouldn't he?

[Scott Greczkowski]

Originally posted by James_F
What a minute here... Do we have something DBS to talk about here??? :hurah:

Yup I feel a newscast coming on tommorow. :D

[James_F]

Originally posted by SParker
If Rupert tried to swoop in he would have to go through this whole process too wouldn't he?
Probably as much since he doesn' t own another DBS system here. I'm not sure if he owns any stock in Echostar anymore, but if he did, he'd have to sell it. If not, then I doubt there would be much from the feds.

[Mike123abc]

He probably would since he has so many broadcast companies in the US. Although I expect it would go through and go through quick.

[James_F]

Question...

GM is very profitable now. Might they not sell DirecTV to NewCorp and hold on to Hughes? Paying out shareholders isn't as important as it was a year ago.

[MarkA]

It wouldn't surprise me if it goes to News Corp. My main question is - if it goes to News Corp will it remain DirecTV (branded) or will it become American Sky Broadcasting (like he owns British Sky Broadcasting, etc...)?

[James_F]

Spend billions of dollars to buy a company and then spend millions to re-brand it. Not likely.

[Mike123abc]

Probably be like Sky DirectTV like Echostar Dishnetwork and Hughes DirectTV, DirectTV the product name and Sky the company.

[Sherlock]

There is nothing that I've found that says even a majority of the staff are against it. "Staff" could be one person. There was news last week regarding some in-fighting between a couple of the "staff".

http://biz.yahoo.com/djus/020919/1717000917_1.html

Not everyone in the DOJ is in total agreement. So, what's new?

I don't see this as conclusive. Maybe when we get "more", we'll know "more".

[Mike123abc]

Late update... Wall Street Journal article says (I would post link but subscription site):

Senior staff at Justice and FCC to recommend merger not go forward, but Charlie Ergan going to Justice department to give deposition. WSJ expects several weeks of intense negotiation to try to save merger. At issue what will ED* have to give up to allow competition to appear in DBS... including giving up claim to wing sats.

WSJ is not so confident that the merger is dead, but now that ED* will really have to make a lot of concessions to make it happen. Ergan to be at FCC tomorrow (Wednesday) and DOJ next week.

Link for those that subscribe:

http://online.wsj.com/article/0,,SB1032824992579524713,00.html?mod=home%5Fwhats% 5Fnews%5Fus

Date says article posted Sept 24th, so essentially it was just posted.

Reading the article again for about the 4th time, it seems to imply that they might have to give up a CONUS slot. Something along the lines of they can use the slot until another sat company comes along and builds a sat for it. It speculates that given todays investment environment that it may be a long time before someone can put together a serious proposal for using the slot, build the sat and get it launched.

[Richard King]

Charlie has stated that giving up a slot is a deal breaker. Their gains in doing so would be minimal at best, so doing so wouldn't be cost effective unless the total terms of the merger were renegotiated. Then again, maybe the stock market has already "renegotiated" the terms in the past year.

[Richard King]

EchoStar Chief to Fight for Deal in Visit to FCC

http://sg.search.yahoo.com/search/news_sg_pf?p=ukey%3A5182066

[Curtis0620]

Ding-Dong the deal is dead.

[Sherlock]

http://biz.yahoo.com/djus/020924/0123000031_2.html
A Hughes spokesman said, "we still feel confident the merger is going through." EchoStar said talking about staff recommendations amounts to " premature speculation."

[James_F]

Originally posted by Sherlock
http://biz.yahoo.com/djus/020924/0123000031_2.html


Of course they'd say that.

[invaliduser88]

Let's see...

Next Charlie chat, if the merger is really dead.

"When will picture quality improve?"

"Sorry, the merger was the only way we could improve picture quality."

"When will more HDTV content be added?"

"Sorry, the merger was the only way we could add more HDTV content."

"When will 'Channel X' be added to Dish?"

"Sorry, the merger was the only way we could add more channels."

[Uncle Peter]

I hope the Merger doesn't get approved. It would be a Monopoly then and then Ergan could charge what he wanted for channels.

[Chris Freeland]

It's not over till it's over. I think a last minet deal might save the merger but Charlie may have to give up one or both of the wing slots. If E* and D* have to give up a Conus slot that will be a deal breaker, but I believe that if giving up one or both the wing locations is the only way to save the merger, it might be worth it for E* and D* to consider this option. It seams to me that ED* could still provide all 210 DMA locals, expanded core, expanded HD, International and broadband all from the three Conus locations. With this solution the consumer would still have the benefits of increased bandwidth of a combined ED* and competition from 61.5 and or 148.

[James_F]

Yea and pigs might fly. :rolleyes:

[bogi]

I hope so :D But then I have ATT-Comcast to worry About :(

[Richard King]

Yea and pigs might fly.And when they do, I stop looking up. Of course, when they do I could start a satellite dish cleaning business. :D

[Put-man]

Originally posted by Rking401
...I would think it will be up because of all the now freed up cash they have on hand. The first thing he should do is attempt to buy back the Vivendi investment at a greatly reduced price tag. It seems pretty obvious because of the price spread between DISH and GMH that the market has not expected the merger to work out for some time.

Well, the stock is off about 3.5% in heavy trading so far, with about 3 hours to go in the trading day.

[MarkA]

"I hope the Merger doesn't get approved. It would be a Monopoly then and then Ergan could charge what he wanted for channels."

Sky Angel
R/L DBS (coming soon)
various local cable providers

[James_F]

Originally posted by Rking401
And when they do, I stop looking up. Of course, when they do I could start a satellite dish cleaning business. :D
Did you just mention pig fade?
http://members.cox.net/jamesf1/media/pig_fade.jpg

[Geronimo]

This is a staff recommendation----not DoJ action. But it does not look good for the merger.

[John Corn]

:lol:.....good one James

News Corp keeps eye on EchoStar merger

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1031119606801

[invaliduser88]

Do you really want Murdoch to get hold of Directv instead? Can we say "Global monopoly".

[Richard King]

Did you just mention pig fade?I just blew my Cherry Pepsi up my nose. That has to be worse than gecko fade. :lol:

Well, the stock is off about 3.5% in heavy trading so far, with about 3 hours to go in the trading day.So much for my bright idea. This really surprises me since no one in the market expected the news to be good.

[CanOBeans]

"Staff at the Justice Department were preparing to oppose the EchoStar-DirecTV due to anticompetitive issues, but no final decision had been made, a person familiar with the situation told CBS.MarketWatch.com Tuesday. The FCC is also expected to block the merger, The Wall Street Journal reported."

[bryan27]

"Echostar and Hughes have rejected the proposal, saying they need the 17 channels at issue to provide advanced services, such as high-speed Internet access, and local and international programming. The companies say these frequencies are needed to compete with the giant and entrenched cable companies, including Cablevision, and offer more choice for consumers."

If these 17 frequencies are needed so badly:

1. Why hasn't E* purchased the 2 unassigned frequencies?
2. What will the New E* do when Echo-3 is dead Angel-1 is up and SA says you can't use them anymore because we are using them to send programming to South America and Africa?

At least 8 of those 17 frequencies now don't seem so important. I wouldn't put it past E* to find a way to steal the 6 SA frequencies through some kind of lawsuit claiming the frequencies are now theirs since they have used them.

[cnsf]

Here's another good one on CBS MarketWatch (http://cbs.marketwatch.com/news/story.asp?guid=%7BAA32E3B7%2D1A1D%2D452B%2DAB0B%2D 3A078B599D65%7D&siteid=mktw)

Sorry, Charlie :lol:

Feds set to oppose EchoStar-DirecTV
Murdoch's News Corp. may return from the wings

By Luisa Beltran, CBS.MarketWatch.com
Last Update: 5:47 PM ET Sept. 24, 2002

Staff at the Justice Department were preparing to oppose the EchoStar-DirecTV due to anticompetitive issues, but no final decision had been made, a person familiar with the situation told CBS.MarketWatch.com Tuesday. The FCC is also expected to block the merger, The Wall Street Journal reported.

Staff of the Justice Department's antitrust arm believe such a deal would stifle competition in the satellite-television market, The New York Times said. DirecTV is the market leader, but EchoStar has been closing the gap in terms of subscribers served, analysts noted.

Any regulatory blockage of the EchoStar-DirecTV would be a major win for Rupert Murdoch, chairman of News Corp., who waged a one-year campaign to acquire DirecTV, the No. 1 U.S. satellite TV provider, before walking away after EchoStar made its unsolicited offer last year.

Ergen will meet with FCC Chairman Powell Wednesday, an FCC spokeswoman confirmed. The EchoStar CEO is to continue his campaign for regulators' approval of the company's acquisition of DirecTV.

Any meeting between Ergen and Powell is not out of the ordinary, EchoStar spokesman Marc Lumpkin said, who declined to confirm if Ergen would meet with regulators Wednesday.

"We have met with the FCC on numerous occasions in the past and will likely continue meeting with the FCC throughout the ongoing merger process," Lumpkin said.

News of the Justice Department's likely decision caused EchoStar (DISH: news, chart, profile) shares to plunge $1.36, or 7.8 percent, to close at $16.04, while Hughes Electronics (GMH: news, chart, profile), which owns DirecTV, shed 41 cents, or 4.7 percent, to $8.40, and News Corp. (NWS: news, chart, profile) eased 9 cents to $19.95. General Motors (GM: news, chart, profile), parent of Hughes, fell $3.42, or 8.2 percent, to $38.16 Tuesday.

Murdoch would be interested in renewing efforts to acquire DirecTV if the EchoStar acquisition were blocked, said a person familiar with the situation at News Corp.

The Justice Department is expected to render a decision on the EchoStar-DirecTV merger by the end of September or during the fourth quarter.

EchoStar's Lumpkin said the agency and the Federal Communications Commission were still reviewing the merger.

"As far as GM is aware, the process is ongoing and not complete," spokesman Jerry Dubrowski said. "We believe the merits of the case are strong, and we believe the DOJ is evaluating the transaction based on merits of the case."

If the merger ends up blocked, Hughes would receive a $600 million breakup fee, a Hughes spokesman said. EchoStar has also pledged to buy PanAmSat (SPOT: news, chart, profile) from Hughes.

"From a Hughes standpoint, this would give us more financial freedom to continue to enhance our business," the Hughes spokesman said. "But we still feel confident the deal is going to go through."

Executives at News Corp. could not be reached for comment.

Luisa Beltran is a reporter for CBS.MarketWatch.com in New York.

[Richard King]

"From a Hughes standpoint, this would give us more financial freedom to continue to enhance our business," the Hughes spokesman said.
Hughes needs to be VERY careful in any comments they make about the merger. The $600Million is contingent upon them promoting the merger and doing everything possible for it to succeed through to the end of the decision process. Any statements indicating that they may want the merger to go away would probably end up with the $600M tied up in court for years. Then again, it probably will anyway.

[Mike123abc]

I have no doubt that E* knew they would eventually have to give up 61.5. I doubt that they will have to give up 148 since there are a few empty slots out west. It is just standard negotiating tactic to ask for everything and settle for what you really want. No way the FCC in its right mind would allow one company to effectively hold 5 of the best slots.

The deal will probably not go through if they have to give up one of the 3 CONUS slots since E* would be paying billions for essentially 14 transponders net gain. D* subscribers are not worth that much. Dish has 91 transponders (50 conus, rest wing) already.

[John Walsh]

In the article it says " the $11.2 billion dollar deal"

Since when was this an $11.2 billion dollar deal or am I missing something.

[Mike123abc]

Since the stock price of E* has dropped to less than half of what it was. It is a cash and mostly stock deal.

[Kagato]

So how much or the merger do you think will be politics? Charlie was the Dems largest contributor the last election cycle. While Murdock is one of the biggest Repub pusher. The FCC still has to weigh in correct? And by all rights, the extreme pro-business anti-consumer slant of the Powell FCC should rubber stamp the merger in a heartbeat.

[James_F]

Unless they are protecting other business interests....

[Sherlock]

Originally posted by Rking401
Hughes needs to be VERY careful in any comments they make about the merger.

You can't believe everything you read.

DirecTV not considering management buyout - Hughes
http://biz.yahoo.com/rc/020926/media_hughes_shaw_1.html

NEW YORK, Sept. 25 (Reuters) - Hughes Electronics Corp. (NYSE:GMH - News), owner of the largest U.S. satellite television service DirecTV, on Wednesday debunked a media report that DirecTV executives were considering a management buyout.

"Any implication that the leaders of any Hughes operating company are working on plans for an independent future are just plain false," Hughes Chief Executive Jack Shaw said in a statement.

[DCSholtis]

Combined E*/D*...Price in the billions....
E* alone......lets see......No Sunday Ticket.....no MLBEI....No NBA pack......etc.....you decide
D* alone......all packs mentioned still in effect.....PRICELESS.....

[jrjcd]

oh, dish does ok without the ticket-if a salesman can't sell the product because of THAT(esp if he has locals available), then he needs to get into some other business(some of these young'uns just don't remember when we sold oodles of E* sat receivers without the ticket AND locals could only be gotten with an old fashion antenna-)

[Scott Greczkowski]

From todays USA Today....
http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20020926/bs_usatoday/4483285

And the story continues.

[Lyle_JP]

E* alone......lets see......No Sunday Ticket.....no MLBEI....No NBA pack......etc.....you decide
D* alone......all packs mentioned still in effect.....PRICELESS.....

DCSholtis, there are a whole lot of people on this Earth who couldn't care less about sports. Here's a few things I find priceless:

No monthly PVR fees
CBS high definition
WSBK
KTLA
Discovery Channel high definition

And I'm willing to bet that there are one or two people on this board who find monthly subscriptions to Extacy and Ten priceless as well. :p

-Lyle J.P.

[Karl Foster]

The no monthly PVR fee is great if you have big bucks up front to pay for equipment. I personally don't have $549 to drop for a PVR, but $39 purchase and $9.95 per month like I paid for each of my UTV units is much easier to swallow. I paid $78 for both UTV units and upgraded one to 105 hours for another $120. I would have had to pay $1100 for two 721's and that would cost $35 minimum payment on a credit card, far surpassing the $9.95 I pay for my two UTVs for service fees each month - and I don't have to pay interest. :)

The others would be nice, but since I have my locals and Fox East/West in addition, and no HDTV capabilities, Directv suits me just fine, and I don't subscribe to any sports programming (may buy NBA this year, though). :)

No p*ssing contest intended. Just a little friendly jab.

[James_F]

And anyway DirecTV is moving away from PVR fees so that might be a moot point.

[mnassour]

Originally posted by invaliduser88
Let's see...

Next Charlie chat, if the merger is really dead.

"When will picture quality improve?"

"Sorry, the merger was the only way we could improve picture quality."

"When will more HDTV content be added?"

"Sorry, the merger was the only way we could add more HDTV content."

"When will 'Channel X' be added to Dish?"

"Sorry, the merger was the only way we could add more channels."


...and what part of this isn't true.....?:rolleyes:

Folks....the Times is (as usual) a day late and a dollar short. The USA Today article above is more than likely much more accurate, if this merger process is working as others have.

[James_F]

Hey if they wait another year, this deal might be worth millions! :rolleyes: