New York -- Likening his current battle with cable companies to standing on
the edge of a cliff, EchoStar Communications Corp. chairman Charlie Ergen said
that despite speculation that his pending merger with Hughes Electronics Corp.'s
DirecTV Inc. unit will fail to receive regulatory approvals, he is still
convinced that the deal can get done.
'I think that's where we're headed,' Ergen said at the Satellite Broadcasting
& Communications Association's SkyForum conference here Wednesday. 'Whether
it's a 500-foot cliff or a 100-foot cliff, I don't know. Without the bandwidth
[as a result of the merger], we won't be able to compete for all 100 million
Despite several published reports claiming that both the Federal
Communications Commission and the Department of Justice are poised to block the
deal on anti-competitive grounds, Ergen said he was still optimistic.
'We're playing to win,' he added.
But for the most part, Ergen dodged most questions about the merger, in
contrast to an earlier session with DirecTV CEO Eddy Hartenstein. Ergen avoided
questions concerning his options after the merger, as well as whether he would
pay a $600 million breakup fee should the deal fail.
While Hartenstein said earlier that the two parties would likely walk away
from the deal should they fail to gain federal regulatory approvals by the Jan.
21 'drop-dead' date, Ergen replied that it would depend on the situation.
'I make decisions based on the information I have,' Ergen said. 'I don't
spend a lot of time on decisions I don't have to make. If it comes down to Jan.
21, we'll have to sit down with GM [General Motors Corp., Hughes' parent] and
decide what to do.'
He gave a similar response when asked if EchoStar would pay the breakup fee,
which Hartenstein had earlier said his merger partner was obligated to do.
'There are certain circumstances where we would pay as much as $600 million,
and there are certain circumstances where they would pay as much as $600
million,' Ergen said.
He added that if it is determined that EchoStar would have to pay the fee,
'We would absolutely honor our contract.'
Ergen also took a shot at News Corp. chairman Rupert Murdoch, whom he outbid
last October in the bidding for DirecTV.
Murdoch has been widely thought to have launched an intense lobbying campaign
against the DirecTV/EchoStar merger, and according to a Wall Street
Journal article Wednesday, he even held a prayer meeting with several
religious-broadcasting groups to get their backing against the deal.
Asked what role he thought Murdoch played in blocking the deal, Ergen said,
'I didn't hold any prayer meetings with religious broadcasters. If God is making
this decision, I like my chances -- at least compared to