Satellite

DirecTV Consolidates in Latin America

10/11/2004 3:51 AM Eastern

DirecTV Group Inc. and News Corp. announced a series of transactions with Grupo Televisa SA, Globopar and Liberty Media Corp. Monday that will result in the reorganization of the companies' direct-to-home satellite-TV platforms in Latin America.

Sky Brasil and DirecTV Brasil will merge, and DirecTV Brasil customers will migrate to Sky Brasil. DirecTV Group will acquire the interests of News Corp. and Liberty in Sky Brasil.

DirecTV affiliate Galaxy Mexico will close its operations and sell its subscriber list to Sky Mexico. DirecTV customers in Mexico will be offered the opportunity to migrate to Sky Mexico. DirecTV Group will acquire the interest of News Corp. and, jointly with Televisa, the interest of Liberty in Sky Mexico.

And DirecTV Group will acquire the interests of Globo, Televisa, News Corp. and Liberty in Sky Multi-Country Partners, which has DTH platforms in Colombia and Chile. Sky customers in Colombia and Chile will migrate to DirecTV.

DirecTV Group is paying $579 million in cash for the equity stakes in the Sky platforms.

Richard Greenfield, of Fulcrum Global Partners LLC, said News Corp. would benefit by essentially selling to DirecTV stakes in three money-losing joint ventures.

For DirecTV, it’s a neutral event -- a competitor is eliminated, but there are near-term costs to combining the businesses, Greenfield said in a report.

David Joyce, of J.B. Hanauer & Co., called the transactions positive for Grupo Televisa, which gets out of a money-losing investment in Sky Multi-Country Partners (operating in Chile and Columbia) and could get more programming fees in Mexico after the two satellite platforms there consolidate.