EchoStar to gain satellites in deal with News Corp

LITTLETON, CO: Pay-TV broadcaster EchoStar is to sell a 37% stake in the company to News Corp. and telecomm MCI WorldCom in return for satellites and broadcast licenses.

LITTLETON, CO: Pay-TV broadcaster EchoStar is to sell a 37% stake in the company to News Corp. and telecomm MCI WorldCom in return for satellites and broadcast licenses.

Shares in the Colorado-based EchoStar rose on Monday when the deal was announced. By mid-morning the stock had gained three and a half points to 38.5.

As part of the deal News Corp. will gain 24.3 million Class A shares and MCI WorldCom will gain six million.

In return, News Corp. will hand over to EchoStar two satellites and a license to broadcast 28 channels. The exchange of licenses still requires the permission of the FCC though.

EchoStar also agreed to drop its $5 billion lawsuit against News Corp.

It alleged Rupert Murdoch's company had breached an agreement to acquire 50% of the company.

The suit arose when News Corp. and EchoStar planned to launch a satellite service aimed at breaking the pay-TV monopoly of the cable companies.

However, they couldn't agree which company would gain the contract to supply consumers with the set-top-boxes needed to receive the system.

MCI has also gained the right to package its telephone service with the pay-TV system.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.