Deal could clear way for merger of Sky, DirecTV
RIO DE JANEIRO — Organizacoes Globo ceded control of satcaster NetSat to Rupert Murdoch’s News Corp. Thursday in a deal that could clear the way for a merger of the Sky and DirecTV platforms in Latin America.Globo owned a 54% stake in NetSat, which operates Sky Brasil, with minority partners News Corp., which had 36%, and Liberty Media with 10%. According to a statement from Globo holding company and financial arm GloboPar, News Corp. will pump an extra $50 million into NetSat in the next 18 months. Globo’s stake was immediately diluted to 49.9%, and will be diluted further once News Corp. completes the capital infusion. It is expected that Globo’s stake will eventually decline to 37%, while News Corp.’s will up to 51%. Brazil does not limit foreign ownership of DTH firms; investment in cablers is capped at 49%. A Globo spokesperson confirmed that News Corp. is taking over operation of the satcaster immediately. NetSat is presently being run by a pool of directors after CEO Marcos Torres left in May after just a few weeks in the job. Director of planning and new business Robert Steijntjes also ankled recently. Globo announced last year that it wanted to sell part of its pay TV distribution assets, including NetSat and cabler Net (formerly known as GloboCabo), to cut debt and to focus on content rather than distribution. Globo’s debt, much of it denominated in U.S. dollars, has been aggravated by currency depreciation, as the real has declined in value by 30% so far this year. This deal could clear the way for a merger of Sky and DirecTV platforms in Latin America, the only region where both systems operate — and both are struggling to survive. The two held merger talks last year when Murdoch was negotiating to purchase DirecTV. Now that DirecTV is being acquired by EchoStar, there is speculation that Murdoch could strike a deal for the DirecTV Brazil operation — Sky has over 700,000 subs versus DirecTV’s estimated 435,000 — or try to bring together the rivals on a pan-regional basis. DirecTV operates regionwide, while Sky is available in Mexico, Chile and Colombia. It grounded its operation in Argentina earlier this year because of the economic crisis. Televisa is the majority owner of Sky Mexico, but its executives have acknowledged that a merger would make sense. However, it would face regulatory opposition in Mexico and Brazil, the two largest markets in the region. Pay TV penetration in Brazil remained stagnant last year at 9% or 3.5 million homes.