Triple news for Echostar
US pay-TV operator Echostar is making a lot of news just now. First up, Echostar’s Charlie Ergen is reported to be quietly accumulating XM-Sirius’ debts. If correct, this would put him in a prime position to take control of the company, which we discuss below. Second story is that Echostar is also getting cosy with India’s Dish TV pay-TV operation. The third story is not so good.
As far as the XM-Sirius story goes, the Wall Street Journal is reporting that Echostar Corp has bought $300m-worth of Sirius debt, which matures on Feb 17. The WSJ says that Sirius recently converted part of that debt to equity, which means either that Echostar boss Charlie Ergen is already holding a significant stake in XM-Sirius or that he holds senior bank debt. Either puts him in a position of influence over XM-Sirius. The pay-radio broadcaster’s shares were up a few cents at 14c on the news.
Second slice of action takes us to India, and to Delhi-based namesake Dish TV, controlled by the Essel Group and Zee TV. It’s shares rose sharply on unconfirmed reports that Echostar’s name is in the frame as front-runner for the Essel conglomerate’s search for an international partner. Dish India’s senior managers declined to comment on the speculation. Charlie Ergen is said to have made a few visits to India last year, although details are vague. Dish TV, despite tough competition, remains market leader in DTH with some 5m subs.
Third news story, less good for Echostar, concerns its never-ending litigation with DVR specialist TiVo. A Court Motion, filed by TiVo to strike out comments from an expert witness that its Patents are “invalid” has been granted. “This Court has scheduled a hearing on February 17-18, 2009 to address TiVo’s motion requesting that EchoStar be found in contempt for violation of this Court’s permanent injunction.”
TiVo now requests of the Court that all “invalidity contentions” be stricken from the expert report of Dr. V. Thomas Rhyne, Echostar’s expert for the upcoming hearing. In addition, TiVo argues that Echostar should be precluded from introducing any evidence or argument concerning validity at the hearing.” We’ll know more on Feb 18.