New York -- DirecTV Inc. president Eddy Hartenstein said he expects the
proposed merger between News Corp. and DirecTV parent Hughes Electronics Corp.
to close by the end of the year.
"I think this one will stick," Hartenstein said at the Satellite Broadcasting
& Communications Association's Spring SBCA SkyFORUM meeting here Tuesday.
"We just got put on public notice at the FCC [Federal Communications Commission]
Friday. We're optimistic that we could perhaps even get this approved through
the regulatory process before the end of the year."
Earlier this week, the FCC said it had started the public-comment period for
the merger, which normally lasts about 90 days.
Hartenstein added during the conference that with News Corp. as its new
controlling shareholder -- it will own a 34 percent equity stake but a majority
voting share in Hughes after the merger -- it will be better able to deliver
local channels in more markets. Hartenstein reiterated DirecTV's guidance that
it would have local broadcast channels in 100 markets, up from the current 54,
by the end of the year.
He said that in News Corp., DirecTV will "have a shareholder which, unlike
the current majority shareholder, really wants to aggressively grow the
business. GM [Hughes parent General Motors Corp.] has been a great parent, but
for reasons of their own, they have to focus on automotive. They will basically
let us go, and [we will] basically be a better service -- more innovation, more
interactive, more high-definition, more local markets."
In another conference Tuesday, Fox Entertainment Group executive vice
president of corporate affairs and communications Gary Ginsberg said concessions
News Corp. agreed to make to get the deal to pass regulatory muster are set in
News Corp. -- 80.6% owner of Fox Entertainment -- has said that it will
adhere to program-access rules to make its cable and broadcast networks
available to all distributors at reasonable prices.
"That will be written into the Justice Department's consent decree and
formally codified as part of the agreement," Ginsberg said at the Banc of
America Securities LLC media conference here. "We plan to abide by that. If we
do try to violate it, there are provisions for appeals to the FCC, but we would
have to answer to the FCC."
Ginsberg also said Fox will not use retransmission-consent rules to give it
an unfair advantage when dealing with cable operators.
"We plan on playing fairly," he added. "That, too, has an appeals process. If
we abuse our retrans, we are answerable to the FCC. We don't plan on withholding
any of our channels."
Ginsberg touted Fox Entertainment's Fox News Channel -- the No. 1
primetime-household-rated basic-cable channel in the country during the first
quarter, the first time that has happened in 12 years.
He pointed to the disparity between the affiliate fees Fox News receives
compared with those of its main rival, Cable News Network.
Fox News was launched in 1996, and most of its programming agreements won't
expire until 2006, Ginsberg said. He added that currently, Fox News receives
about 21 cents per subscriber, per month, while CNN receives about 38 cents.
"The differential is substantial," Ginsberg said.