EchoStar Bids For DirecTV-Ordered Satellites

Scott Greczkowski

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Sep 7, 2003
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EchoStar Bids For DirecTV-Ordered Satellites
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EchoStar Bids For DirecTV-Ordered Satellites
The unpredictability of EchoStar Communications [Nasdaq: DISH] was exhibited late Thursday when the company asked a U.S. bankruptcy court judge to allow it to buy three satellites that archrival DirecTV has ordered from bankrupt Loral Space and Communications [OTC BB: LRLSQ].

Littleton, Colo.-based EchoStar offered to buy the DirecTV 7S satellite under construction on the Space Systems/Loral factory floor for $100 million cash, while also agreeing to take over DirecTV's order for two additional satellites, DirecTV 8 and DirecTV 9S, according to court documents. In a case before the U.S. Bankruptcy Court, Southern District of New York, EchoStar argued that its offer was a better deal for Loral creditors than the DirecTV contract and the court should act in the creditors' interest. Judge Robert Drain will consider EchoStar's request this afternoon.

Further objection to Loral's contract with DirecTV and amendments to its previous contract for the DirecTV 7S came late Thursday in a filing by Loral's Official Committee of Unsecured Creditors. The committee is concerned about a provision that would allow DirecTV to cancel the contract if Space Systems/Loral is purchased by another company. "Such an unrestrained power would put inappropriate restrictions on SS/L's ability to consider numerous transactions in its efforts to reorganize," the committee argued.

For more on the EchoStar/Loral saga, see the Oct. 13 issue of SATELLITE NEWS. For info on subscribing to PBI Media's newsletters, check out our Web site at
I see it as a clever move. It will probably result in one of 3 things happening:

1. DirecTV gets the satellites like nothing happened

2. The bankruptcy court breaks the contract forcing DirecTV to outbid E* and pay more $$

3. E* actually ends up with the satellites. E* could use them. The D* satellites would be a nice addition and would let E* do LIL to all DMAs much sooner.

D* cannot possibly let E* get these satellites, so I suspect that they will either get the court to enforce the contract (would have to demonstrate that the contract is going to make money for SSL) or out bid E* to keep them.
Curtis0620 said:
Charlie must be terrified of Rupert to try something like this.

Absolutely not. What makes you think that? This move is very clever on Dish's part. It has nothing to do with any fear of Rupert.
Dish is trying to buy Loral, Loral's contract with D* says that they can cancel the contract if the company is sold. I believe the court and Loral are afraid that if they sell to Dish they D* will drop the contracts and they lose millions. Charlie is telling them that he will buy the sats, at a better price even, and there is no way they will lose money.

This looks like a very smart business decision to me!
Go!! Charlie Go!!!

I just wonder what Dish & Directv will look like say 5 years from now, and if Voom will even be around say next year at this time. It seems like Charlie would want to buy the Voom sat service and incorporate their hd channels into Dish's since it is on the same sat(61.5) for dish also.

It is going to get very interesting from now on..... ;)
Curtis0620 said:
Charlie must be terrified of Rupert to try something like this.

I also think quite the opposite. And from all accounts Charlie is correct, it would be a better deal for Loral creditors yet benefit Dish and be somewhat of a blow to Direct Tv.
I agree, Dish would be doing it to benefit themselves and they would just happen to benefit Loral's crediters in the process. Dish would do this to gain more satellite space and to put a hurt on DirecTv at the same time. This would hurt DirecTv in that they would not be able to add all the local markets as quickly and launch as many HD markets in which lots of satellites and space is needed in the future to do this. Dish knows if they do not do this then DirecTv will have more satellite space to compete with them in the future.
All this does is raise rates for all of us. :(

Rupert does not own DirecTV yet, so any talk about him being involved is incorrect. Rupert has no say about any of this.

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