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Technology Stocks : Primestar/TCI Satellite (TSATA)
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To: EPS who wrote (122)10/22/1998 3:42:00 PM
From: EPS  Read Replies (1) of 442
 
October 22, 1998:

UVSG May Seek DBS
'Alliance'

Tulsa, Okla. -- United Video Satellite Group
Inc. may seek "marketing alliances" with
direct-broadcast satellite providers following the
demise of its deal to sell 1.2 million C-band
subscribers to PrimeStar Inc.

In April, UVSG agreed to sell its
Superstar/Netlink Group to PrimeStar for
about $480 million in preferred stock,
convertible to PrimeStar equity. But the sale
hinged on PrimeStar's successfully buying
high-power DBS assets. Facing government
opposition, PrimeStar pulled its $1.1 billion deal
to acquire those assets from News Corp. and
MCI Communications Corp. last week.

In a conference call, UVSG executives told Wall
Street analysts Tuesday that cost-cutting
measures and price increases helped to boost
the C-band business's cash flow significantly. In
the third quarter, Superstar's cash flow was up
64 percent versus the same period a year ago.

UVSG chairman Gary Howard told analysts that
he likes the C-band business as "a pure cash
machine," which UVSG was only willing to give
up to own equity in a high-power DBS business.
That option is still open, but it seems more likely
that UVSG will seek a marketing deal with
PrimeStar or DirecTv Inc. to migrate C-band
customers who opt to switch, executives said.

Superstar has about 60 percent of domestic
C-band subscribers.
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