It would be a “very painful” process for DirecTV to negotiate a deal to acquire rival EchoStar Communications, according to News Corp. chairman Rupert Murdoch.
Murdoch, whose company owns 38% of DirecTV, helped to add fuel to the rumors of a DirecTV-EchoStar merger when he was asked about a possible deal Thursday during an appearance on PBS’ The Charlie Rose Show.
“Well, we’d have to get through the negotiating stage [with EchoStar], which would be very painful,” Murdoch said, joking that it would be painful “maybe” for both him and EchoStar chairman Charlie Ergen, whom he described as a “good friend.”
This week, EchoStar’s stock hit 52-week highs -- including one during Friday-morning trading, when it was at $33.53 per share -- following a Los Angeles Times story that said the buzz at Allen & Co.’s media conference was that Murdoch was working on a deal to buy EchoStar to combine it with DirecTV.
Ergen tried to buy DirecTV several years ago, but in 2002, the Federal Communications Commission and the Department of Justice effectively put the kibosh on that deal. Shortly thereafter, News Corp. acquired its stake in DirecTV. But Murdoch said he thinks the regulatory environment for such a merger has changed since 2002.
“I think today it is different -- the broadband coming, the revolution, there are many more alternatives, ways of getting pictures and information, that I think it would be much harder for the government to turn it down today,” Murdoch said. “But as I say, we’d have to get through a negotiation with Charlie. Then there would be the question of who would run it.”
Murdoch also reiterated comments he’s made previously -- that DirecTV is negotiating with potential partners about delivering a wireless-broadband product.
“The technology doesn’t seem to be a problem -- it’s getting the frequencies,” he said.
