The real loser in the DOJ move is not even Primestar, which is a going concern. It's Rupert Murdoch, who probably wishes he never heard the name of Charlie Ergen. First off, Charlie drove the bidding for the 110 slot to $682 million in the only satellite spectrum auction ever. Then, he attempts to merge with Charlie, only to find his rhetoric wakes up the cable industry, and they promptly offer to boycott his programming. Finally, he stands to lose $1 billion or more to Charlie in a breach of contract suit.
The Primestar deal was a bad one for Murdoch anyway, and he made it with his tail between his legs. Nonetheless, he certainly can't afford to have it blocked. As things sit, the cost of money alone must run him about $100 million to date, and he has no business. What's more, he is faced between launching as a fourth competitor so far behind that he would have to sell at a loss until 2010 in order to gain market share, or risk losing the slot.
Of course, there is a 3rd option. He could try to merge with Charlie again, couldn't he...
Regards,
NOEL |
