DirecTV – News Corp Deal Delayed by FCC

On Friday the FCC announced that they were delaying their review of the proposed acquisition of direct-satellite TV provider DirecTV by Rupert Murdoch’s omnivorous News Corp. Reportedly, Ken Feree, FCC media bureau chief, said the agency will be requesting more documentation and will be consulting further with the Justice Dept’s antitrust division.

One has to wonder if the delay is at all due to the massive amounts of flak the FCC received over its ham-fisted handling of the media ownership rules review. Perhaps Feree is feeling a little shell-shocked and wants to make sure that the Justice Dept. will back him up if he recommends to approve the merger.

On top of News Corp’s big TV network holdings — like FOX, FOXNews, FX — local TV stations, and movie studio, News Corp is already a big player in European and East Asian direct-broadcast satellite TV. Adding DirecTV to his stable would give Murdoch a massively global satellite TV presence with the ability to significantly leverage the content News Corp controls to undercut and squeeze out competitors.

Last year Echostar, which owns competitor Dish Network, was set to buy DirecTV, but the deal got nixed by both the FCC and the Justice Dept., which rightfully feared the US satellite TV duopoly shrinking into a monopoly.

GE division Hughes has been trying to dump DirecTV for a while now, even though DirecTV has been showing signs of growth. Unfortunately, any and all potential buyers must be well-heeled players in the communcations industry, meaning that any deal will probably result in some kind of industry concentration.






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