Sky, DirecTV merger OK’d in Brazil

Gov't agency approves deal, imposes restrictions

RIO DE JANEIRO — In the most expected decision in the Brazilian pay TV sector for the past years, the government anti-monopoly agency Cade has approved the merger of Sky Brasil and DirecTV Brasil, with some restrictions.

The new company resulting from the merger, which is still unnamed, will have about 1.3 million subs, which represents 97% of Brazil’s satellite TV market.

It will be the second largest pay TV operator in Brazil, behind cabler Net Servicos, which has 1.6 million subs. The spokeswoman for the new satellite company said within one year it will replace all set-top boxes of DirecTV Brasil’s 400,000 subs with Sky Brasil boxes. In the meantime, Sky and DirecTV will continue to operate with separate brands.

The new company will cover all migration costs.

Luiz Eduardo Baptista, currently general director of DirecTV Brasil, will be the new operator’s general director.

As for the restrictions imposed by Cade, the spokeswoman the company will abide by them and is studying how to do so.

Cade’s most stringent restriction puts a five-year ban on the new company having exclusive rights to Brazil’s top five soccer leagues, a major asset for attracting subs here.

In the upcoming ruling on another case, related to a request of indie operator association Neo TV to have access to sports events programming, Cade is expected to establish clear procedures for the end of exclusive programming practices.

Authorities also have determined the new satellite operator will have to charge the same fees countrywide. That reg aims to prevent the company from charging higher fees in the regions where it will not have competitors, such as in rural areas and small towns.

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