Justice Department Recommends Merger be Blocked.

[squigly1]

Tuesday, September 24, 2002

Satellite TV merger opposed, lawyers say

THE NEW YORK TIMES

WASHINGTON -- 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 anti-competitive, lawyers involved in the review said yesterday.

If approved by Charles James, the head of the antitrust division, the decision would be a major victory for Rupert Murdoch, chairman of the News Corp., who has waged an expensive and elaborate campaign to stop the deal so he can buy DirecTV.

A decision to forbid EchoStar to buy its only rival would also reflect a rare instance of opposition to a corporate merger by the Bush administration.

[james99]

We all knew it could go either way.

Here's a meatier story: CNN

[beerme1]

There was an article in the USA today on Thursday that said the Justice Dept. wont even begin taking Ergen's deposition until Oct. 4th and further that there is no way a decision will be made prior to the elections in November. The article figures that Ergen will have a last chance to make some concessions to get the deal to fly.

I have said all along that I didn't expect this deal to go through, and still don't. The question for Charlie will become where does he want to cut his losses? By giving up transponders to an outsider, ala Cablevision, amongst other concessions or pay the huge payment to DTV in the event the deal doesn't get finalized?

Since I don't have a link I will provide you with this interesting last paragraph.
"Meanwhile, DirecTV told analysts that cash flow in the third quarter will be higher than expected - because it will have fewer subscribers than it projected. It blamed the shortfall on a weak economy and a crackdown on subscribers who used hacked decoder cards to get free premium chanells.
"It's bad because subscriber growth is shrinking" says Steve Mather of Sanders Morris Harris. "While they have a half decent answer, it's a bad situation."
Hughes closed at $9.01 up 61 cents, while
Echostar finished at $17.34 up $1.30"