Satellite

EchoStar Next to Settle with Gemstar

3/02/2004 5:31 AM Eastern

On the heels of last week’s settlement between Gemstar-TV Guide International Inc. and Pioneer Electronics Corp., the interactive-programming-guide vendor has made peace with EchoStar Communications Corp.

Gemstar-TV Guide and the direct-broadcast satellite provider announced Tuesday that they have reached a long-term, nonexclusive patent-license and distribution agreement.

Under terms of the deal, EchoStar will make a $190 million one-time payment to use Gemstar-TV Guide's intellectual property and technology, along with the TV Guide brand on its IPGs.

Also, TV Guide Channel will launch on EchoStar’s Dish Network, and the two companies’ existing distribution agreement for horse-racing channel TVG Network will be extended. TV Guide Channel will become part of Dish’s most widely distributed programming package, "America's Top 60."

Separately, EchoStar will acquire Gemstar-TV Guide's Superstar/Netlink Group LLC, UVTV and SpaceCom businesses and related assets for approximately $48 million in cash.

Gemstar-TV Guide has also agreed to purchase from Wisdom Media Holdings Inc. the minority interest in SNG that it does not already own for $15 million in cash.

"I am … pleased that we will be able to monetize our C-band, UVTV and SpaceCom businesses, which are not core to our strategic plans going forward," Gemstar-TV Guide CEO Jeff Shell said in a prepared statement.

"We have consistently said that if we could find a buyer that placed a high enough value on SNG's subscribers, then we would welcome a sale of the business," he added.

Parallel to the Pioneer deal, EchoStar and Gemstar also signed an agreement to resolve all outstanding litigation between them.

Last month, a federal court overturned a lower court’s ruling in a patent-infringement suit Gemstar-TV Guide and SuperGuide Corp. had filed against EchoStar, sending the nearly four-year-old suit -- which alleged that EchoStar violated three of SuperGuide's patents for on-screen program guides for satellite-TV services -- back to the lower court.

"We're happy to put our disagreements with Gemstar-TV Guide behind us, and we look forward to working with the new Gemstar team," EchoStar chairman and CEO Charles Ergen said in a prepared statement.

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