[Steve Mehs]

EchoStar and DirecTV executives told personnel with the Federal Communications Commission last week that if they merge operations, the combined entity could create $4.8 billion in EBITDA synergies by 2007.

Both companies have been stepping up their merger discussions with regulators in Washington, D.C., during the past two weeks. During a July 3 meeting at the FCC, detailed in an ex parte filing sent to the agency, executives presented what they said are the synergies that could be produced through their merger. The meeting included officials from various FCC bureaus and offices, including the agency's Media and International bureaus.

In addition to the $4.8 billion in EBITDA synergies by 2007, the companies said the merger could generate cost savings through the reduction of subscriber acquisition costs as well as elimination of some capital and administrative costs. Revenue synergies include incremental revenues from expansion of local TV offerings to all 210 DMAs, increased near-video-on-demand and pay-per-view sales, more HDTV, increased advertising revenues and new broadband service offerings.

Most expect any D.C. moves on the DBS merger to surface during the fall. In addition to the FCC, the Justice Department's antitrust officials are taking a look at the deal.

From SkyReport (Used with Permission)

 

[Jacob S]

They will probably ask how will this merger benefit consumers, not Dish/Direct business themselves, and how would this go and save consumers money or be better for consumers. Do you think by just providing LIL in every market alone be good enough reason to allow the merger or will there have to be more of a benefit than that?