USAToday:EchoStar, DirecTV deal in jeopardy?

1877 Views 7 Replies 7 Participants Last post by Darkman, Sep 5, 2002

John Corn

Discussion Starter · Sep 3, 2002

NEW YORK -- EchoStar's $18.3 billion deal to merge with DirecTV's parent, Hughes Electronics, is running into turbulence as it enters the home stretch.

The most significant new signal: Justice Department ( news - web sites) staff reviewing antitrust questions -- and expected to recommend this month whether the deal should be challenged -- have been busy deposing satellite retailers, programmers and others opposed to the creation of a satellite monopoly.

''The staff is preparing to litigate'' to block the merger, says Legg Mason's Blair Levin, a critic of the deal. While ''it's often true that they prepare to litigate and then say 'yes,' generally speaking, it's not a good sign.''

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Mike123abc

· #2 · Sep 3, 2002

Actually it will be a relief to finally get this merger talk over with. I know there will be some that will complain that they will not get locals in their markets, but they really need to be pressuring their congress people not hoping for a merger. All this jazz about not being able to recieve OTA but the station does not give a waiver should be solved by Congress.

Wasting tons of satellite bandwith for local in local to all markets should not be what satellite is about. People turn to satellite for real advantages, not to have cable in the sky. True, without the merger 70-80%+ will have LIL, but one has to hope they stop adding markets and start adding real programming.

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PeterB

· #3 · Sep 3, 2002

I agree, we need to drop this antiqued "local station" idea. I was happy to get Hartford locals on DTV, but only for network programming. I could care less if i get my NBC FOX CBS etc from NY or CT as long as a could get them, and according to the stupid FCC regs, I couldnt.

Its nice to see press on the merger being not so rosy as once reported.

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Jacob S

· #4 · Sep 4, 2002

The locals DO make a BIG difference, there are many around here that will NOT get a satelite until locals are available. That is a common question I have 'do you have locals?' and the answer is 'no' and then I am told 'tell me when you get locals on the satellite, until then I will stick with cable'

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SParker

· #5 · Sep 4, 2002

exactly, I don't really know how both DBS companies could serve all 200+ DMA's unless the FCC gave both of them a ton of satellite slots.

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mnassour

· #6 · Sep 4, 2002

Pretty simple...turn off all of either DirecTV or Dish's locals and fill them up with the bottom 100 markets (more or less). That's what the merger's all about.

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Mike123abc

· #7 · Sep 4, 2002

They have pretty much said that it is profitable to do the top 80 or so markets with LIL. So, if they do not merge they will each do the top 80 markets or so.

Each provider on its own could probably do a lot more markets, DirectTV should have the capacity for 100 markets and E* all DMAs (they have extra sat capacity via wing satellites). Direct could do more if they wanted to use a wing sat. But, they claim it is not profitable to go much past 80.

Now with the FCC filings they claim that all 210 markets would be profitable after 6 years. This is because the combined company gets all the revenue, and does not have to split it with the rival DBS.

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Darkman

· #8 · Sep 5, 2002

hehe - i was just going to Post something simular, but was beatten to the punch i see....Anyhow here it is (the Source in the beginning):
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EchoStar, DirecTV deal in jeopardy?
Source: SkyReport 09/04

According to USA Today, the proposed EchoStar/DirecTV merger may be running into trouble as it enters the home stretch.

The national newspaper reported this week that the newest sign that the deal could be in jeopardy is that the Justice Department has been deposing satellite retailers, programmers and others opposed to the combination of the two companies.

"The staff is preparing to litigate" to block the merger, Legg Mason's Blair Levin told USA Today. He said that while "it's often true that they prepare to litigate and then say 'yes,' generally speaking, it's not a good sign."

Others told the newspaper that antitrust officials will at least insist on concessions, especially on price and control over programming. But that led some to wonder how flexible EchoStar CEO Charlie Ergen will be in talks between the two sides, USA Today said.

In response to the article, EchoStar spokesman Marc Lumpkin said, "We have a high degree of confidence in the integrity of the FCC and the Department of Justice process and that they will make the correct decision for the American consumer. At this point, it's clear that our competitors are engaging in uninformed, premature speculation."

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