Echostar holding on to Voom satellite (NewsDay) 03.18.05

[bradley]

source: http://www.newsday.com/business/ny-bzvoom4180037mar18,0,6226940.story?coll=ny-business-headlines

Echostar holding on to Voom satellite (NewsDay) 03.18.05

BY HARRY BERKOWITZ
STAFF WRITER

March 18, 2005

(NewsDay) EchoStar Communications chairman Charlie Ergen said yesterday he has no intention of giving up the Voom satellite that the company is buying from Cablevision.

Charles Dolan, chairman of Cablevision Systems Corp. and founder of its imperiled Voom satellite TV service, has been trying to alter the deal that his chief executive son James signed in January to sell the satellite for $200 million as part of a plan to shut down Voom.

"The only thing that would prevent us from acquiring the satellite would be if we don't get [Federal Communications Commission] approval," Ergen said during a call with analysts. "Other than that we intend to move forward with the transaction," he said, adding that he expects to get approval in three to six months.

Cablevision's board has given Dolan, who opposes the shutdown, until March 31 to come up with a plan to save Voom, which had $660 million in losses last year, and take it off the company's hands.

But if Voom is forced to switch to a different satellite, it would have to quickly replace satellite dishes installed at 40,000 customer homes with bigger, compatible ones, analysts say. That would make Dolan's rescue attempt an even more challenging and expensive mission.

In a regulatory filing with the Securities and Exchange Commission, Cablevision said Voom has $285 million in assets, including the satellite, and $136 million in liabilities.

Ergen did not say whether he would consider leasing space on the Voom satellite to Dolan, who has put up $10 million of his own cash and Cablevision stock to help keep Voom alive.

When asked what the message is when a cable pioneer like Dolan is betting some of his cable stock on satellite TV, Ergen said Dolan "very much has visions that make sense."

EchoStar, whose service is called Dish Network, gained 430,000 customers in the fourth quarter, helping push profits to $70 million, compared with $2.7 million a year earlier. Revenue rose 28 percent to $1.93 billion. In January, EchoStar announced it had topped 11 million subscribers.

EchoStar said on Wednesday that in an internal review it had found "significant deficiencies" in record-keeping that drew the SEC's attention but that no adjustment of its financial statements would be required and procedures were being corrected. Its stock price jumped 2.8 percent yesterday, or 81 cents per share, to $29.64.

Copyright © 2005, Newsday, Inc.

 

[jbphoenix]

Well I guess that does answer the question concerning whether or not C. Dolan is wanting to keep Rainbow 1. I will bet that C. Dolan's legal staff is trying to figure out a way to squash the deal before the March 31st deadline.

I hope V* survives, but I am sure C. Ergan won't budge on his end unless he can make a substantial profit from doing so..

 

[Bruce]

Boy, these newspaper are pretty late with the info, I posted all of this as of tuesday.

 

[DucTape]

Well I guess that does answer the question concerning whether or not C. Dolan is wanting to keep Rainbow 1. I will bet that C. Dolan's legal staff is trying to figure out a way to squash the deal before the March 31st deadline.

I hope V* survives, but I am sure C. Ergan won't budge on his end unless he can make a substantial profit from doing so..

Yeah my bet is he would part with the deal for say 400 million from Chucky.

 

[JimP]

Since the FCC leans in the direction of more competition, not less, it seems that all Charlie Dolan would have to do it tell the FCC that he'd like to give it another chance and have 3 satellite companies, not 2.

Any thoughts??

 

[Tvlman]

Didn't Ruppert originally try to buy Dish AND DirecTV and the FCC or SEC nixed the deal? So maybe there's a limit to how many you can own.

 

[Jamey K]

Ergen tried to buy D*. But Uncle Charlie said no.

 

[Cyclone]

Was is the FCC or the FTC that nixed the Dish/DirecTV merger?

 

[jsb_hburg]

Was is the FCC or the FTC that nixed the Dish/DirecTV merger?

The States and USDOJ filed suit against the merger. By the time hearings were scheduled, a ruling would have occured beyond the deal's termination date. The date could have been extended by mutual consent of the parties. Hughes decided not to extend it. The court chose not to hear and rule on the case within a week and a half before the termination date. So, the deal terminated. EchoStar paid Hughes the $600 million termination fee.

 

[rocatman]

Since the FCC leans in the direction of more competition, not less, it seems that all Charlie Dolan would have to do it tell the FCC that he'd like to give it another chance and have 3 satellite companies, not 2.

Any thoughts??

First, it can be argued that Voom could survive without the Rainbow-1 satellite. Second, Charles Dolan is still an officer of Cablevision and if he presents anything that would harm the approval by the FCC of the transfer of the licenses at 61.5, he would cause Cablevision to be in breech of the contract they have with Echostar.

 

[cfarm]

The States and USDOJ filed suit against the merger. By the time hearings were scheduled, a ruling would have occured beyond the deal's termination date. The date could have been extended by mutual consent of the parties. Hughes decided not to extend it. The court chose not to hear and rule on the case within a week and a half before the termination date. So, the deal terminated. EchoStar paid Hughes the $600 million termination fee.

I thought the FCC weighed in against this as well. You can find multiple references to it here:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-271A1.txt

I like the fact they harp on their clear desire for added competition in the space. The more I read through that piece the more I wonder how the FCC is going to view this transfer application. Will they simply look at this as an end around attempt by Dish? Will they take it personally?

 

[AxE]

Didn't Ruppert originally try to buy Dish AND DirecTV and the FCC or SEC nixed the deal? So maybe there's a limit to how many you can own.

Yeah but Ergen is not buying VOOM, just the satellite.

 

[dragon002]

The States and USDOJ filed suit against the merger. By the time hearings were scheduled, a ruling would have occured beyond the deal's termination date. The date could have been extended by mutual consent of the parties. Hughes decided not to extend it. The court chose not to hear and rule on the case within a week and a half before the termination date. So, the deal terminated. EchoStar paid Hughes the $600 million termination fee.

EXACTLY CORRECT, FINALLY, directv never wanted the merger and sat back and did NOTHING, and by doing so made ergen choke up six hundred million in CASH

dragon

ps , if ergen gets that sat which he needs badly, why would he help a FUTURE competitor?? a reason please!!
for gods sake he has two failing sats , one at 61.5 and one at 110 ergen needs that sat and ergen DOES NOT CARE ABOUT VOOM or 40,000 subs that he and murdock can split later!?!?

 

[JimP]

dragon002

The only reason that I can see that Ergen would help Voom out is if there is something in it for Dish. So what's on the table? Access to some Voom channels, utilization of unused capacity, support in getting the FCC to approve the sale.

 

[dragon002]

charlie is not gonna help any one but echostar, murdock is not going to help any one but directv. 41,000 subs mean NOTHING to them. by the way i was away for a while how was that joke of a protest, DOWNGRADE DAY, go get a grip

dragon

 

[Bear]

EXACTLY CORRECT, FINALLY, directv never wanted the merger and sat back and did NOTHING, and by doing so made ergen choke up six hundred million in CASH

Actually, that was when Hughes then sold D* to NewsCorp.

 

[kelljc]

EXACTLY CORRECT, FINALLY, directv never wanted the merger and sat back and did NOTHING, and by doing so made ergen choke up six hundred million in CASH

dragon

ps , if ergen gets that sat which he needs badly, why would he help a FUTURE competitor?? a reason please!!
for gods sake he has two failing sats , one at 61.5 and one at 110 ergen needs that sat and ergen DOES NOT CARE ABOUT VOOM or 40,000 subs that he and murdock can split later!?!?

61.5 is not for USA English speaking people, 2nd. their are 23 more TP"s that's not in the deal , or is it?. 3rd. You're Guess why "E" wants 61.5 it has no use for 90%+ dish owners. so why ,if not to expand for another market. Good For " DISH " not for YOU:?"" Edit " Unless it was a ECHOSTAR Bird launched by them with "VOOM" as the holder? of the other 23tp's. just a opion?

 

[Dvlos]

Woah! Are Voom's numbers 40,000+ this is cause for ... something?