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Murdoch-PrimeStar deal?
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May 27, 1997: 10:05 a.m. ET
News Corp. reaches tentative pact to join satellite TV service PrimeStar
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NEW YORK (CNNfn) - Rupert Murdoch's News Corp. has reached an initial agreement to join satellite dish television service PrimeStar Partners in a bid to revive his troubled satellite TV venture.
Murdoch was able to overcome objections from Time Warner Inc., which has cable television interests and is a partner in PrimeStar, by contributing the satellites that he and MCI Communications Corp. control, along with transmission sites and licenses, the Wall Street Journal said Tuesday.
Along with Time Warner, other cable companies owning PrimeStar include Tele-Communications Inc., Comcast Corp., Continental Cablevision Inc. and Cox Communications Inc. Such a deal between Murdoch and a group of cable companies would probably set off regulatory alarms with government, industry and consumer groups.
Earlier this year, Murdoch had attempted a satellite television deal by agreeing to purchase EchoStar Communications Corp. for $1 billion. With that deal, he had hoped to launch his ASkyB digital broadcast satellite service.
However, that agreement fell through and EchoStar filed a $5 billion breach-of-contract lawsuit against News Corp. The company is also expected to sue any companies, including the PrimeStar firms, that he thinks interfered with EchoStar's deal.
To that end, Murdoch has agreed to indemnify all of the PrimeStar firms from legal action by EchoStar, the Journal said.
PrimeStar is the second-largest digital broadcast satellite service and has 1.8 million subscribers. DirecTV, owned by General Motors Corp.'s Hughes Electronics unit, is the top provider with 2.5 million customers.
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News Corp.
PrimeStar
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