TS News - ASkyB Joins Primestar
TELE-satellit News, 12 June 1997
ASkyB Joins Primestar
NEW YORK, New York, USA, 97/06/12 (SatND) -- Rupert Murdoch's ASkyB
digital TV venture will team up with PrimeStar, a
DTH service set up and operated by U.S. cable companies -- including Mr
Murdoch's arch enemy Time Warner. He won't have too much influence on the
newly created company, though -- just a 30 percent non-voting interest.
PrimeStar Partners, the nation's second largest provider of direct
broadcast satellite (DBS) video services, today announced the
reorganisation of its ownership structure from a partnership into a new
corporation called PrimeStar Inc. that will include U.S. satellite assets
from News Corp./MCI.
Under the terms of the new ownership structure, all existing PrimeStar
partners will contribute their partnership interests and PrimeStar
subscribers to the new company in return for a combination of stock and
cash. Current TCI Satellite Entertainment (TSAT) shareholders will retain
approximately 37 percent ownership of PrimeStar, Inc., with Time Warner
Satellite Services/Newhouse (approximately 30 percent), Comcast
(approximately 10 percent), MediaOne (approximately 10 percent), Cox
(approximately 9 percent), and GE Americom (approximately 4 percent)
rounding out the ownership group.
News Corp./MCI will transfer to PrimeStar Inc. the 110 degree high power
orbital position, the license for 28 DBS transponders, and two satellites
under construction at Loral. The two Loral satellites from News Corp./MCI
will be added to the two Loral satellites of the same advanced model which
will be owned by PrimeStar Inc. upon completion of the roll-up. In exchange
for the News Corp./MCI DBS assets, News Corp./MCI will receive non-voting
convertible securities with a total liquidation value of approximately
US$1.1 billion, comprised of non-voting convertible preferred stock and
convertible subordinated notes.
The transaction is subject to approvals of federal regulatory agencies.
Primestar and Tempo Satellite have agreed to dispose of their rights in the
license to operate 11 transponder channels at the 119 West Longitude
orbital slot. FCC regulations forbid any company to hold licenses for more
than 32 DBS transponders. Concurrently, ASkyB has agreed to sell its
Gilbert, Arizona satellite uplink facility to Tele-Communications, Inc. for
a purchase price which represents ASkyB's investment in the facility, plus
related interest expense.
By: Peter Klanowski
(c)TELE-satellit 1997. All rights reserved.
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