News & Commentary
EchoStar-DIRECTV Merger: Day Two
EchoStar's stock rises on the rumors.
By Phillip Swann

Washington, D.C. (July 18, 2006) -- EchoStar's stock rose 6.2 percent on Monday after news reports suggesting it might merge with rival DIRECTV.

Company shares hit an 18-month high, closing at 32.52.

Several news services on Monday reported that merger rumors were flying at last week's Allen & Co. media conference in Sun Valley, Idaho. The Los Angeles Times wrote that EchoStar CEO Charlie Ergen told conference attendees that a merger could save $3 billion annually in expenses.


EchoStar CEO Charlie Ergen

However, some analysts are skeptical, noting that the Federal Communications Commission rejected a DIRECTV-EchoStar merger proposal four years ago, saying it violated antitrust laws.

DIRECTV, which now has 15.4 million subscribers, and EchoStar, which has more than 12 million, control nearly 100 percent of the satellite TV audience.

But the industry has changed dramatically since the merger rejection with the entry of telephone companies offering TV services and the emergence of online video services. (See: Will DIRECTV & EchoStar Merge?)

Officials at DIRECTV and EchoStar declined to comment yesterday on the merger reports.

Swanni Sez:
Despite the explosion of rumors, the DIRECTV-EchoStar merger is still far from a sure thing. Not because the two companies are afraid of federal regulators, but because EchoStar CEO Ergen is loathe to give up control in any situation. (Ergen clashed with News Corp. officials in 1997 when the Murdoch-controlled company offered to merge with EchoStar; the disagreements led to the dissolution of the merger offer.)

However, times have changed and Ergen may have concluded that he can no longer operate independently.

To learn more, click EchoStar

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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

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