DirecTV, Liberty near finish line
News Corp. transfer imminent; Burke warns of satellite troubleTop execs at DirecTV and Liberty Media said Tuesday in separate Q&As that they expect News Corp. to finalize the transfer of its control over the satellite TV provider to Liberty in the next month or so.
Liberty Media president and CEO Greg Maffei said at the Goldman Sachs Communacopia conference in New York that the deal probably will close in October, while DirecTV president and CEO Chase Carey said earlier in the day that it is "mostly finished."
"There really haven't been issues; most of the issues relate to Liberty and News Corp., not DirecTV," Carey said, adding that "it seems Washington will get tired of batting that issue around and move on. In a month or two, give or take, we hope to get on with the business and move on."
He added that he doesn't expect any major changes on DirecTV from either a strategic or operational perspective once the deal is done but that it should "enable us to deal with some of those issues" related to the company's balance sheet, which will be the initial focus.
For his part, Maffei said the move is a strategic one for Liberty.
"We believe that content companies are far more challenged without distribution assets," he said.
Competitive threats also were a hot topic during the first day of the two-day investor confab.
Carey said that cable's triple bundle has been an issue in terms of customers being lured by attractive offers but emphasized that there's always a number of customers who would have churned out anyway.
Comcast COO Stephen Burke said satellite should be more worried about triple play, the success of which he said has been one of cable's recent surprises.
"Satellite is going to be in big trouble," Burke said. "Chase sounds like a guy in big trouble."
For his part, Carey touted DirecTV's VOD service, which is launching before year's end, as being more user-friendly than cable's VOD and also talked up the company's plans to roll out 100 new high-definition channels by year's end.
Comcast's Burke noted that that there's increasing competition from both satellite and the telcos, particularly Verizon, but said he doesn't see any "knockout blows" on the horizon. He added that Comcast has two new businesses solidifying over the next few years: commercial telecommunications services and interactive advertising. He said the former should become a "material business" by 2008 or 2009, while the latter should do so by 2010.
Also during the day, Carey said neither the current slump in the housing market nor the credit crunch has had any meaningful impact on DirecTV's business, while Time Warner Cable president and CEO Glenn Britt noted that his company has been seeing a "little uptick" in bad debt from subscribers who live in subprime housing areas.
"Everyone is trying to figure out what will be the impact of the subprime situation and so-called credit crunch," he said, adding that there are no plans to offer bigger discounts for triple-play customers in subprime markets.
Meanwhile, Maffei said Liberty's priorities in the short term are Liberty Capital and the newly announced Liberty Entertainment, which will include the interest in DirecTV as well as Starz Entertainment, Starz Media, FUN Technologies, GSN and WildBlue Communications.
"I don't think it's going to be a media conglomerate like Time Warner, but I do see benefits across various properties. Some of the elements are there to build synergies -- and shame on us if we don't," he said.