×
You will be redirected back to your article in seconds

DirecTV questioning

Murdoch, News Corp. grilled on hill over bird buy

WASHINGTON — Even though most analysts believe Washington antitrust cops will ultimately approve News Corp.’s $6.6 billion deal with DirecTV, topper Rupert Murdoch has been put through the paces this week.

In recent days, senators, interest groups and rival EchoStar have expressed deep concerns about the merger to Congress, the Justice Dept. and the Federal Communications Commission.

Call for scrutiny

In a letter, two influential senators asked the Justice Dept. and the FCC on Wednesday to closely scrutinize News Corp.’s deal to acquire a controlling stake in satcasting giant DirecTV. “We believe that this merger raises very important competition and communications policy issues and should be scrutinized carefully by both of your agencies,” Sens. Mike DeWine (R-Ohio) and Herb Kohl (D-Wisc.) wrote assistant attorney general Hewitt Pate and FCC chairman Michael Powell.

The message came the same day Murdoch headed to Capitol Hill for another hearing and one day after EchoStar, the nation’s second-largest satcaster, asked the FCC to block the merger.

Vertical competition issues

DeWine and Kohl, the most senior members of the Senate’s antitrust subcommittee, argued that News Corp.’s 34% stake in DirecTV would create several vertical competition issues. They asked the agencies to examine the merger’s effects on distribution and programming markets and to consider whether it would trigger a spate of mergers and further consolidation as other media companies struggle to remain competitive.

The same questions were raised during a Senate Antitrust Subcommittee hearing Wednesday that focused on Murdoch’s extensive sports holdings and the power he would have to raise prices on cablers and DirecTV subscribers because of that leverage.

“I’m a Cincinnati Reds fan, and I also have DirecTV. I get the Reds on Fox Sports Network; my dad watches them on cable TV … Are you telling me we both should be nervous about this deal, that we’re going to be paying more?” DeWine asked.

Fee increases

Gene Kimmelman of the Consumers Union responded with an emphatic yes, explaining that Murdoch could start hiking prices for sports programming. If cablers refused to pay the higher rate, DirecTV would be the only distributor carrying it, giving him incredible leverage to drive prices up.

“There lies one of our serious concerns,” Kimmelman said.

But Murdoch brushed aside such arguments, pointing to the history of DirecTV’s increases — $4.04 in nine years — as evidence.

“I don’t know what they’re going on about,” Murdoch remarked, referring to cable companies’ track record of fee increases.

Rival EchoStar, however, is not convinced. Last year, EchoStar failed to win FCC and Justice Dept. approval of its attempt to buy DirecTV; News Corp. actively lobbied against the deal.

Working from the premise that turnabout is fair play, EchoStar’s argument against News Corp.’s acquisition of DirecTV should come as no surprise.

In a letter to the FCC, the company argued that the deal will force all TV providers, including DirecTV, to pay higher programming fees.

“In turn, DirecTV could absorb the higher fees into News Corp., while EchoStar and cable would pay a higher fee and be forced to pass that on to consumers,” EchoStar argued.

The company appealed to the agency’s sense of patriotism and concerns about giving an Australian company access to U.S. markets when the same trade opportunities don’t exist there. It also called for an investigation into charges of possible collusion and copyright infringement.

“News Corp. was blocked in 1997 from merging with Primestar, a satellite company, for colluding with cable companies,” the company argued. “News Corp. has every opportunity to do this again.”

More Scene

  • Don Cheadle and Andrew Rannells Black

    Don Cheadle, Andrew Rannells Talk Snorting 'Coke' on 'Black Monday'

    “Black Monday” show creators David Caspe and Jordan Cahen divulged an intriguing detail to come later in the first season of the new Showtime comedy at its world premiere, held at the Theatre at Ace Hotel on Monday night in Los Angeles. “The fourth or fifth episode opens with a sexual harassment seminar, which very well [...]

  • Alfonso Cuaron attends the 44th Annual

    Alfonso Cuarón to LAFCA: 'Thanks to Your Help We Can Break Down Walls'

    Inclusion was the big winner at the L.A. Film Critics Association Awards, which was held Saturday night at the InterContinental in Century City. “This year’s winners are the most diverse in LAFCA’s 43-year history,” announced its president, Claudia Puig, adding that 14 out of their 18 awards were won by women and people of color. [...]

  • Mandatory Credit: Photo by Max Malandrino/REX/Shutterstock

    Hollywood Power Players Assemble to Save Iconic Deli Nate 'n Al

    A group of Hollywood executives and celebrities have banded together with the intent to save Beverly Hills deli and star haunt Nate ‘n Al, a stone’s throw from tourist destination Rodeo Drive. A consortium of investors including music kingpin Irving Azoff and wife Shelli, Universal Filmed Entertainment Group chairman Jeff Shell, and Rande Gerber and [...]

  • Charlie Collier, FOX Chief Executive Officer

    'The Passage' Team Talks Diversifying Races, Genders and Ages of Book Characters

    “The Passage” star Saniyya Sidney was unaware that the book version of her character was originally white until her father, a fan of Justin Cronin’s apocalyptic trilogy, informed her during the audition process. “I was like, ‘Oh, she is?'” Sidney told Variety at Thursday’s series premiere in Santa Monica, Calif. “And when I got it, [...]

  • KiKi Layne and Stephan James'If Beale

    Regina King Praised by 'If Beale Street Could Talk' Co-Stars for New 50/50 Initiative

    Two days had passed since Kiki Layne and Stephan James had attended their first Golden Globes and the “If Beale Street Could Talk” co-stars were still trying to wrap their heads around having been there. “It was such a special night — and pretty unreal,” says James, who was also nominated for his work opposite Julia Roberts [...]

  • Steven Van Zandt, Edie Falco, Tony

    'The Sopranos' 20th Anniversary Reunion: Cast, Producers Remember James Gandolfini

    Jan. 9’s 20th anniversary reunion of the cast and producers of HBO’s “The Sopranos” was a raucous family gathering from its first moments. “I saw a picture of myself in the newspaper,” series creator David Chase said at the start of the event. “And I thought, 20 years. Jesus Christ.” “People come up to me,” [...]

More From Our Brands

Access exclusive content