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Satellite Powers Hush On Deal

4/16/2001 02:00:00 AM Eastern

NEW YORK — Speaking at the SBCA SkyForum event here, News Corp. chairman Rupert Murdoch and DirecTV Global chairman Eddy Hartenstein offered little insight into News Corp.'s reported attempts to merge Hughes Electronics/ DirecTV into its Sky Global worldwide satellite operations.

In fact, both men seemed to be flexing their negotiating muscles by downplaying any urgency to carry out the rumored merger. Murdoch, who was the keynote speaker at the SkyForum event, said a U.S. satellite presence would be "nice" for the Sky Global operation that covers virtually every other region of the world, but not necessary for its continued success.

"Let me say up front, that although the U.S. is an important part of such a worldwide satellite network, our well-documented negotiations to gain access to the American market do nothing to put our global ambitions on hold," Murdoch told the gathering of satellite investors and analysts. "The U.S. presence is nice, but it's not necessary to the overall success of the operation."

News Corp. has spoken with both DirecTV parent Hughes Electronics and EchoStar about acquiring one of the U.S. satellite TV operations to add a U.S. presence to the growing Sky Global worldwide satellite constellation.

During a separate interview in front of the SkyForum crowd, Hartenstein would only say: "I think there are transactions out there that could give General Motors what it wants," and that he would prefer a deal to be made "sooner rather later."

However, he cautioned that General Motors and Hughes Electronics would not be pressured into making a deal for less than the full value of the company. "We are not going to make a deal simply for the sake of making a deal," Hartenstein said, adding that no one working in the day-to-day operations of any of Hughes Electronics' various divisions is at all distracted by the proceedings.

Asked to speculate on the possibility that both EchoStar and DirecTV might one day be merged into one U.S. satellite service by an eventual buyer — as some press reports have speculated Murdoch may be attempting to do — Hartenstein said such a transaction would add significant strength to resulting satellite service.

Ask about antitrust complications, Hartenstein commented that he believes the Federal Communications Commission will redefine the rules of ownership for multi-channel service providers and television networks that wish to add more owned-and-operated affiliates.

He said that if the rules are relaxed so that cable operators are allowed to consolidate and amass market shares approaching 30 percent or more, then satellite companies should be given greater flexibility as well.

Murdoch, meanwhile, said News Corp.'s focus continues to be content rather than platforms, although he pointed out that satellite systems provide significant delivery efficiencies.