FCC Seeking More Data from News Corp., Liberty
Agency at Day 114 of 180-Day Merger-Review Window
By Ted Hearn -- Multichannel News, 6/18/2007 3:51:00 PM MT
Regulators at the Federal Communications Commission want more information about News Corp.’s $11 billion deal to transfer its large minority stake in DirecTV to Liberty Media.
More than 100 days into its review, the FCC sent detailed letters June 15 to News Corp., DirecTV and Liberty on a range of topics. The agency requested access to previously undisclosed side agreements reached between News and Liberty related to regional and national sports programming. Liberty has said that some of the agreements relate to services it would need to continue operating three regional sports networks that come with the deal.
The FCC also asked for details on all exclusive contracts DirecTV has to provide video programming and whether that programming is provided on an a la carte basis.
Last December, News Corp. agreed to swap its 38.4% interest in DirecTV, $550 million in cash and three RSNs in Pittsburgh, Denver and Seattle for Liberty's 19% voting interest in News Corp. The deal is designed to end the threat that Liberty chairman John Malone evidently posed to the Murdoch family’s controlling position in News Corp.
News Corp. chairman Rupert Murdoch reportedly wanted to exit the satellite-TV market in a hurry because he feared a long-term competitive disadvantage to cable operators that offer voice, video and data products in a bundle.
The FCC -- which operates under an informal 180-day window to complete a merger review -- issued the information request to News Corp. and DirecTV at day 114. The two companies have until July 9 to respond.
Several requests for information and data appear related to merger-related concerns raised by EchoStar, DirecTV’s main satellite-TV rival.
For instance, the FCC asked for documents to determine whether DirecTV’s retransmission-consent agreements with News Corp.-owned TV stations contained better terms and conditions than the retransmission-consent deals EchoStar has with the same stations.
The commission has asked a number of questions about DirecTV service in Puerto Rico, where a Liberty affiliate operates a cable-TV system. EchoStar has asked the FCC to force Liberty to divest the Puerto Rico cable property.
