Inside Move: Rupe swoops, Echo droops

Marriage rejection is FCC's first in recent memory

There’s at least one man sporting a Cheshire Cat grin now that the Federal Communications Commission has put the kibosh on EchoStar’s merger with DirecTV — Rupert Murdoch.

The FCC decision was a stunner, and not just for the Aussie mogul. It’s the reg agency’s first rejection of a major media marriage in recent memory, and it comes under a Republican administration at that.

EchoStar’s Charlie Ergen could appeal the FCC vote, and he well may, but his chances are bleak. The U.S. Dept. of Justice also is reviewing the deal, but without the requisite FCC licenses, it’s a no-go.

It’s already the stuff of corporate legend how Ergen beat Murdoch’s bid for DirecTV last year. Murdoch is a formidable adversary, and not the kind of guy you want as a foe.

There’s a luscious irony in the fact that Murdoch, a man who aggressively pursued satellite monopolies in Europe and broadcast duopolies in U.S. markets, became such a fervent crusader against the supposed dangers of an EchoStar-DirecTV DBS monopoly.

News Corp. lobbyists have been working diligently behind the scenes in Washington for the last year, but, as Murdoch himself predicted, the game’s not over yet.

Hughes could opt to keep DirecTV, or John Malone could make an entrance as a would-be partner.

And all is not lost for Ergen, a worthy rival to Murdoch. At the very least, EchoStar got more than a peek at its chief rival’s financials and strategy as part of its yearlong due diligence.

Conspiracy theorists argue that Ergen succeeds even without the prize: Two long years of negotiations have harmed Hughes’ morale and depleted its corporate ranks, putting the entire company and DirecTV in a state of limbo.

Meanwhile, Murdoch’s company has grown fitter, more patient and less debt-heavy on its balance sheet, with the flexibility to do a deal that, in the end, might prove better for it and for Hughes.

At the very least, News will pay far less for DirecTV than it would have a year ago.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More TV News from Variety