Print 13 comment(s) - last by xKeGSx.. on May 5 at 11:18 AM

DirecTV to merge with Liberty Entertainment

DirecTV is the nation's largest satellite TV provider and the company credits its continued success despite the poor economy on the fact that it targets more affluent subscribers who are less likely to cancel service.

DirecTV Group Inc. announced today that it would merge with majority shareholder Liberty Entertainment after Liberty Entertainment is spun off from its parent company Liberty Media Corporation (LMC). The spinoff is an attempt by LMC to simplify its capital structure reports The Wall Street Journal. DirecTV shares are reportedly up 2.8% in premarket trading to $25.26 on word of the merger.

Liberty Entertainment already holds 54% of DirecTV and post spinoff, the company will hold the DirecTV stake, three regional sports networks, and stakes in the Game Show Network and FUN Technologies. As part of the merger agreement shareholders in Liberty Entertainment will get a 0.9 share in Liberty Entertainment and retain 0.1 share of Liberty Starz stock.

The merged Liberty Entertainment and DirecTV business will continue to operate under the DirecTV brand. DirecTV shareholders will get one share of DirecTV Class A common stock for each share they currently own. Liberty Entertainment shareholders will reportedly get 1.11 shares for each Liberty Entertainment share they hold. DirecTV will continue to operate with the same CEO and board after the merger. The WSJ reports that the spin-off and merger is expected to be complete by the end of 2009.

DirecTV stepped in and saved Sirius XM from certain doom in February for a large portion of the company.

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By Dianoda on 5/4/2009 12:24:22 PM , Rating: 0
It's a nice article and all, but is there any reason why DailyTech readers should care about this? Something along the lines of a Direct TV service price hike? Or plans to send a man to the moon? A campaign for great justice?

RE: So...
By UatuTheWatcher on 5/4/2009 12:36:01 PM , Rating: 3
The Liberty Media spin-off will also own a major chunk of XM/Sirius. Combined services of sat radio and TV services combined can lead to some great deals for people who would then be using their Liberty Media products in the living room and in their vehicles.

RE: So...
By Dianoda on 5/4/2009 2:47:13 PM , Rating: 2
When you think about it, that really isn't anything new. There is no change in who controls who. Liberty Entertainment was already in control of DirecTV as a majority shareholder, and DirecTV's influence (which already was effectively Liberty Entertainment's influence to begin with) over Sirius XM is unchanged by this event.

The merger is more like an organization restructuring, but even that appears to be a stretch. Sure, some interesting things could be done with combined satellite TV and radio services, but that potential was already there. All they're doing is joining the two entities (DirecTV and Liberty Entertainment) in a more permanent fashion, and creating the capability to cut some of the organization overhead at a future date. There is no change or new information regarding the prospect or potential of a combination satellite TV and radio service materializing a result of this event.

When you get to the heart of it, this is more closely business news, stuff for the finance folk, and doesn't mean all that much for the tech enthusiast community. The change in stock price is likely more the result of overall market movements, and shareholders approval of the merger would be better evaluated by how the stock preformed in comparison to the market as a whole. From the appearance of it, everything relating to this merger (on the organization side of things) is occurring on paper only, for now at least...

RE: So...
By xKeGSx on 5/4/2009 3:03:40 PM , Rating: 2
A lot has changed with regards to accounting practices. Without getting into it I just hope you can trust me that it has. ;)

RE: So...
By Dianoda on 5/4/2009 6:34:32 PM , Rating: 2
Well, I assume you're talking about accounting for mergers, controlling interests, and non-controlling interests. So the difference in accounting for the merger under the recent revision to FASB 141 and the combined firms issuing one set of financials vs. Liberty Entertainment issuing financials consolidated with DirecTV and DirecTV issuing its own financials. Sure, that cuts out some accounting work, but does the totality of efficiencies and net assets acquired in the transaction balance out the cost of issuing a substantial amount of additional equity? Liberty Entertainment apparently thinks so...

RE: So...
By xKeGSx on 5/5/2009 11:18:23 AM , Rating: 2
Not to mention before would be accounting for only there portion of the net income dividends assets etc. before the merger. Now it's all one and they'll account for everything and eliminate duplicate entries because they are now one company etc etc.

RE: So...
By bhieb on 5/4/2009 12:53:03 PM , Rating: 2
I kinda see your point it is a bit bleh...

Ironically it is a "just the facts" article that most posters/complainers seem to want. An article that just gives us info, with no angle or interpretation of that info. Turns out this is actually kinda boring, maybe we all want some editorial bias/angle after all?

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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