Primestar deal met by skeptics in D.C.

Justice Dept.'s suit against satcaster concerns solons

WASHINGTON — Talks between TCI topper John Malone and News Corp.’s Rupert Murdoch to take control of Primestar may have briefly cheered some on Wall Street, but the tete-a-tete was met in Washington with great skepticism.

“This is fantasyland as far as I am concerned,” said Media Access Project’s Andrew Schwartzman, a critic of the deal that would bring in TCI subsidiary United Video Satellite Group and News Corp. to buy out the interests of Primestar’s current partners, which include Time Warner, Cox, Comcast, MediaOne and TCI Satellite Entertainment.

Prime concern

Schwartzman pointed out that the Justice Dept. has filed a lawsuit against Primestar blocking its acquisition of the DBS licenses now controlled by News Corp. and MCI. Justice wants to block the deal because the satcaster is controlled by cablers. It is not clear why the Justice Dept. would approve a deal that would give Malone, a dominant figure in the cable industry, a large influence over Primestar.

Malone could exert his influence on the satcasting company through his significant personal stake in Liberty, which in turn owns a significant stake of USVG. Referring to Justice Dept. officials, Schwartzman said, “It is incredible to me that they would go for this.”

Justice Dept. reps did not return calls, but usually do not comment on pending litigation. Unless a settlement can be reached, Primestar will face off against Justice Dept. antitrust officials in federal court on Feb. 1.

Rates still ballooning

The Justice Dept. argues that Primestar’s cable industry owners are the worst possible candidates for the valuable DBS slot. Justice Dept. antitrust chief Joel Klein says the DBS license could be an effective tool to combat cable’s monopolistic hold on U.S. consumers. Regulators are desperate for a remedy to cable’s hold on the pay TV marketplace. At last count, average cable rates were rising eight times faster than inflation.

Shares of TCI Satellite Entertainment, which is a major shareholder in Primestar, were up slightly after news of the talks were first reported, but they retreated along with much of the rest of the market Tuesday.

More Biz

  • 'Hammerhead' Takes Top Honors at New

    'Hammerhead' Takes Top Honors at New York Television Festival

    WASHINGTON — Talks between TCI topper John Malone and News Corp.’s Rupert Murdoch to take control of Primestar may have briefly cheered some on Wall Street, but the tete-a-tete was met in Washington with great skepticism. “This is fantasyland as far as I am concerned,” said Media Access Project’s Andrew Schwartzman, a critic of the […]

  • Radiohead Coachella

    Radiohead Demands Answers in Drum Technician's Death

    WASHINGTON — Talks between TCI topper John Malone and News Corp.’s Rupert Murdoch to take control of Primestar may have briefly cheered some on Wall Street, but the tete-a-tete was met in Washington with great skepticism. “This is fantasyland as far as I am concerned,” said Media Access Project’s Andrew Schwartzman, a critic of the […]

  • Kevin Durant LeBron James

    Kevin Durant Praises LeBron James' Lakers Move

    WASHINGTON — Talks between TCI topper John Malone and News Corp.’s Rupert Murdoch to take control of Primestar may have briefly cheered some on Wall Street, but the tete-a-tete was met in Washington with great skepticism. “This is fantasyland as far as I am concerned,” said Media Access Project’s Andrew Schwartzman, a critic of the […]

  • Kevin Durant Rich Kleiman

    Kevin Durant Shares His Media Biz Playbook at Variety Sports & Entertainment Breakfast

    WASHINGTON — Talks between TCI topper John Malone and News Corp.’s Rupert Murdoch to take control of Primestar may have briefly cheered some on Wall Street, but the tete-a-tete was met in Washington with great skepticism. “This is fantasyland as far as I am concerned,” said Media Access Project’s Andrew Schwartzman, a critic of the […]

  • David-Zaslav-Discovery Sun Valley Conference

    A Look at Key Trends Facing Media and Tech Companies Ahead of Q2 Earnings

    WASHINGTON — Talks between TCI topper John Malone and News Corp.’s Rupert Murdoch to take control of Primestar may have briefly cheered some on Wall Street, but the tete-a-tete was met in Washington with great skepticism. “This is fantasyland as far as I am concerned,” said Media Access Project’s Andrew Schwartzman, a critic of the […]

  • Spotify logo is presented on a

    Spotify Launches Feature to Help Artists, Labels Submit Music to Playlists

    WASHINGTON — Talks between TCI topper John Malone and News Corp.’s Rupert Murdoch to take control of Primestar may have briefly cheered some on Wall Street, but the tete-a-tete was met in Washington with great skepticism. “This is fantasyland as far as I am concerned,” said Media Access Project’s Andrew Schwartzman, a critic of the […]

More From Our Brands

Access exclusive content