Follow-up: Changes at DirecTV

December 22, 2006

DirecTVJust a quick follow-up and a few additional observations about the Liberty Media – DirecTV buyout, it appears as if the deal has gone through:

“Liberty Media cut a deal Friday with News Corp. that will see the former acquire the latter’s majority stake in DirecTV Group in exchange for Liberty’s 16.3% stake in News Corp., $550 million in cash and three regional sports networks: FSN Northwest, FSN Pittsburgh and FSN Rocky Mountain”.

“The deal, which has been rumored for several weeks, will put cable pioneer John Malone in control of DirecTV, the nation’s largest direct-broadcast satellite provider, with 15.6 million subscribers. Liberty will acquire News Corp.’s 38.5% stake in DirecTV as part of the deal.”

As I mentioned before, its unlikely that subscribers will notice any appreciable difference under Liberty’s management (at least for the time being) and with the news that “Chase Carey is expected to continue to serve as DirecTV CEO.” It looks like that was a fair prediction. One piece of news from the ‘Multichannel News’ article did catch me off guard however.

After the DISH/DirecTV merger rumors died down over the summer, I assumed that would be the last we’d hear of them (at least for the immediate future) however industry analyst Jimmy Schaeffler is quoted as saying:

“I see regulators and legal people in Washington, D.C., being faced with this [DirecTV-EchoStar] merger in the next three to four years and approving it”

Could this acquisition/sell-off scenario have been part of Liberty’s master plan all along? The Multichannel piece goes into greater detail with regard to the mergers feasibility in the age of cable and telco consolidations, and paints a rather plausible scenario for the merger to play out under. Interesting stuff to say the least, we’ll continue to monitor this story.



Posted by Bryan Greenway | | Filed Under DirecTV News


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