[MattJ]

Reported on CNBC this morning, GM and E* have agreed to end the merger. I know the fact that the merger will not happen is old news, but at the this point they have now ended it themselves prior to the contract date in mid- Jan.


Echostar will pay Hughes $600M and will not purchase Pan AM Sat.


I think E* was continuing to pursue a deal only to keep D* off the market as long as possible. Now Hughes has settlled for less $ than the original contract called for and ageed not to force E* to buy PANAM Sat, in order to end the deal early. Does this mean a new deal for DirecTV is coming soon?

 

[JStanton]

Confirmation links:

http://money.cnn.com/2002/12/10/news...star/index.htm
http://news.moneycentral.msn.com/tic...2&Symbol=US:GM

 

[Namlemez]

 Yahoo News Story


Looks no one will be waiting anymore for those hybrid boxes to come out...

 

[Rich Peterson]

I can't believe that Charlie actually paid the $600 million to Hughes as the article says. I was convinced he would find a way to tie that up in court for years.

 

[ksmith4]

It's a write-off, a charge against earnings - sometimes those are a good thing when it comes to earnings reports....and Wall St expectations....and accountants....and paying taxes (or not)....etc.

 

[Scott Gammans]

The corpulent opera diva is uttering words in musical tones.
Quote:

NEW YORK (Reuters) - Rival satellite television services Hughes Electronics Corp. and EchoStar Communications Corp. said on Tuesday they had called off their proposed merger due to opposition from regulators.

Full text:

http://www.washingtonpost.com/wp-dyn...2002Dec10.html


Now that Charlie has forked over $600 million to Hughes, it will be interesting to see what happens with Echostar's stock price and DISH subscriber fees.

 

[archiguy]

I read it as over a billion if you count the merger-rejection fee plus the cash payment to Hughes. I guess we DISH'ers can expect to see our rates skyrocket to help Charlie pay for all that.....


Admittedly I don't understand the world of corporate high-finance, but isn't that a frighteningly large sum of money to completely piss away with nothing to show for it??

 

[jerndl]

Quote:

Originally posted by archiguy IAdmittedly I don't understand the world of corporate high-finance, but isn't that a frighteningly large sum of money to completely piss away with nothing to show for it??

What I never understood is how (or why) anyone actually thought the meger would be approved. I do understand however, that many HOPED that the merger would be approved. It seemed obvious (to me at least) that the merger was doomed from the very start. The whole thing was a big waste of time and money.


Jay

 

[kjnorman]

Quote:

Originally posted by archiguy Admittedly I don't understand the world of corporate high-finance, but isn't that a frighteningly large sum of money to completely piss away with nothing to show for it??

What do you mean nothing to show for it? I'm sure their lawyers got rich. Perhaps one or two of them bought a nice new car, or a house in the Hamptons....

 

[Ken H]

Moderators Note:


Thanks to AVS members MattJ & Namlemez for posting this news. I have merged the two topics into this one, which will be stuck to the top of the HDTV Programming Forum for the immediate future.

 

[DmgInc]

How come nobody has written the usual canned response "what does this have to do with HDTV"? Should this be in the DBS general forum?

 

[vruiz]

Quote:

Originally posted by archiguy I read it as over a billion if you count the merger-rejection fee plus the cash payment to Hughes. I guess we DISH'ers can expect to see our rates skyrocket to help Charlie pay for all that.....

You're talking about the same thing. It's 600 million, period. Echostar will write off an extra 100 million to cover all the expenses incurred during the whole process. Both Echostar and Hughes' stock rose today after the announcement.

Quote:

Admittedly I don't understand the world of corporate high-finance, but isn't that a frighteningly large sum of money to completely piss away with nothing to show for it??

Actually, this termination agreement saves Charlie $2.7 billion by negotiating that Hughes drop the requirement that Echostar purchase PanAmSat, which was part of the original breakup agreement. If the merger wasn't going to go through, this was the best possible outcome for Charlie.

 

[Ken H]

Quote:

Originally posted by DmgInc How come nobody has written the usual canned response "what does this have to do with HDTV"? Should this be in the DBS general forum?

No.

Because one of the proposed outcomes of the merger was 10-12 new HDTV channels, which resulted in huge projections of new revenue for the merged company.


This is not to say it can't be discussed in the DBS General Forum, too.

 

[DmgInc]

They were saying on CNBC that most analysts feel that D*'s value has decreased 20-40% from the previous merger discussions last year and that may bring Murdoch back in to attempt another bid. Would that be a good/bad thing?

 

[s2silber]

How now, DirecTV?


Conventional wisdom is that Rupert Murdoch will try again to snatch DTV. Everyone says that this doesn't bode well for HDTV offerings because Murdoch's "anti HDTV." But how do we know that, other than the fact that Fox offers only its own subpar version of widescreen TV? Could he really put the kabosh on HDTV at D*TV? Would that make any sense? Anyone with any inside business info'?

 

[vruiz]

Quote:

Originally posted by s2silber Everyone says that this doesn't bode well for HDTV offerings because Murdoch's "anti HDTV." But how do we know that, other than the fact that Fox offers only its own subpar version of widescreen TV?

This reminds me of that line from "A Few Good Men":

Were there any signs of violence?


You mean other than the dead body?

 

[MattJ]

Well, here is an optimistic outlook: Rupert Murdoc gets D* and goes low end, using all available transponder space for locals, then Charlie (E*) seeing competition at the low end, goes high-end, adds as much HD as possible and some new and better HD STB's to go with it.


I doubt it could happen though, I don't see a lot of short term profit in the HD programing and thats what both companies really want.

 

[Greg G]

The cable companies are laughing their Arses off. With cable offering HD more and more now (I've got Comcast back in my house for HD NBC and ABC - something I've missed since 9/11) I just don't see how the birds in the sky can compete in the long run without the merger. Of course I am assuming everyone is going to buy HDTVs =)


-Greg

 

[Rick_R]

I think Charlie go one heck of a deal. For $600 million he got to look at the books of his competitor during the discovery phase of the proposed merger. Also, while the merger was pending DirecTV backed off of its agressive blocking of stores selling Dish products. As a result Dish is now being sold in Radio Shack and other stores.


Plus while the merger was pending they agreed on a common platform with DirecTV. The results of this will probably improve both Dish and DirecTV's products in the long run.


Just my opinion.


Rick R

 

[belsokar]

is it just coincidence that Directv accepts the deal one day for $600M in cash, and the next day, signs the deal with the NFL to extend their DirectTicket exclusive contract at $400M/year? Over four years, that's $150M/year they can put towards that $400M. So basically, they just have to find a way to make back $250M/year for the next 4 years. Had they not taken this deal with echostar, I doubt Directv would have been able to afford NFL Sunday Ticket...as with only around 1 million subscribers to sunday ticket, they would either have to triple the cost of the package, or triple the number subscribers...both ways being equally bad for directv..