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garys
01-08-2007, 09:05 AM
DIRECTV's Future with Malone at Helm
Subscriber growth is slowing, cash flow trends are eroding and it ain't gonna be cheap to take its HDTV offering to the next level... so how did DIRECTV perform so well over the past 12 months? Some say the outperformance stemmed from the company's merger and acquisition potential last year that led to a skewed perception of DIRECTV's future. And now that Liberty's John Malone is taking the helm, how will he help shareholders make money off the deal the same way he will?

According to Bernstein Research's Craig Moffett, Malone has three options after he takes control of the nation's largest satellite TV provider later this year. But, the analyst warns, none of them seem compelling for DIRECTV stockholders.

First, Moffett said, Malone could lever the balance sheet by doing one of two things: either issue a special dividend or initiate a massive share buyback. "Special dividends, in and of themselves, create no value for shareholders, and in this case, the negative impact of the interest expenses associated with additional leverage could outweigh its benefits," he said. "A share buyback would only make sense if Liberty views DIRECTV as undervalued" which appears unlikely at current levels.

The second option remains taking advantage of merger and acquisitions. A merger with EchoStar? Not likely, Moffett said. An acquisition by AT&T? Don't rule it out, but still a longshot because "there are no cost synergies whatsoever in combining a telco and a DBS operator." EchoStar, the analyst said, not DIRECTV would be a more logical - and less costly - target for the monstrous AT&T.

And third? Do nothing. It may be the least exciting, Moffett said, but it definitely remains a distinct possibility. "And in that case, Malone would be stuck with an operationally-challenged business" despite the asset swap with News Corp. making sense given the tax savings.

AntAltMike
01-08-2007, 11:00 PM
I've never understood Wall Street's recent love affair with DirecTV. Cable can give you everything that DirecTV can except the Sunday Ticket, and that might change in a couple of years, and they readily do it on a single coax. Cable can bundle internet and telephone, and because of local control, they can operate profitably without coercing $300 in equipment "pre-lease" fees and 2 year committments. If customers understood in advance or comprehended that each time they changed their service, they were usually extending their commitment for another 2 years, they'd lose millions of customers.

As I've posted elsewhere, I'm waiting to see the details of the MTF-1 "one wire" distirbution system, which will be the subject of certification seminar on Thursday and Friday at DSI's Las Vegas office. The DirecTV subscriber share in MDUs I service had been cut in half in the last year, because I have to do $500 add-on wiring and destacking jobs to support DirecTV HDTV in those buildings, and not only is it not worth it to the customer, the home theater guys steer them towards cable so he won't have the headache of trying to get the dual, stacked trunkline installations serviced.

vegassatellite
01-08-2007, 11:41 PM
I've never understood Wall Street's recent love affair with DirecTV. Cable can give you everything that DirecTV can except the Sunday Ticket, and that might change in a couple of years, and they readily do it on a single coax. Cable can bundle internet and telephone, and because of local control, they can operate profitably without coercing $300 in equipment "pre-lease" fees and 2 year committments. If customers understood in advance or comprehended that each time they changed their service, they were usually extending their commitment for another 2 years, they'd lose millions of customers.

As I've posted elsewhere, I'm waiting to see the details of the MTF-1 "one wire" distirbution system, which will be the subject of certification seminar on Thursday and Friday at DSI's Las Vegas office. The DirecTV subscriber share in MDUs I service had been cut in half in the last year, because I have to do $500 add-on wiring and destacking jobs to support DirecTV HDTV in those buildings, and not only is it not worth it to the customer, the home theater guys steer them towards cable so he won't have the headache of trying to get the dual, stacked trunkline installations serviced.


Yeah, but can cable give you Comedy Central in digital? I don't want to watch Cartman ripping on Kyle with a grainy picture.

EZJ
01-15-2007, 10:58 PM
Cable isn't grainy at all around here.

In fact, it's a tough service to compete with.

$33 for Cable
$33 for High Speed Internet
$33 for Phone Service

All on one bill.

The predictions of the last 3 years have certainly came true, and the "low hanging fruit" has been most of the calls I get nowadays.

Of course, I don't market like I used to, so this post is open to interpretation.

dragon002
01-15-2007, 11:10 PM
wow,

my cousin has the triple play here in pittsburgh, $150.00 per month...Expanded basic cable, internet and phone service...GEE all to get ONE bill!!

24.99 vonage, 19.99 dsl, 43.99 DirecTv, 9.99 fax line (vonage)= $98.96/ Month....now who is the idiot here????

EZJ
01-15-2007, 11:42 PM
Very creative Dragon!

Is Vonage Voip?

SimpleSimon
01-16-2007, 12:56 AM
Very creative Dragon!

Is Vonage Voip?
Yeah, it is, but they must have a bunch of ex-AOLers - they are a mean, nasty company. :mad:

They came after me 9 months after I cancelled my account before it was even activated! Sic'd a collection agent on me. Fortunately, he was smart enough to check the data, apologized, and went away.

Sunrocket is pretty bad, too. I hear that Packet8 is OK, but I went with Skype and am very happy. Gonna get one of the USB phones soon.

EZJ
01-16-2007, 06:13 AM
I have a usb phone and did skype this summer.

I had a lot of dropped calls, and the quality was horrible.

This was on an ethernet line at Purdue university as well.

SimpleSimon
01-17-2007, 07:49 PM
I have a usb phone and did skype this summer.

I had a lot of dropped calls, and the quality was horrible.

This was on an ethernet line at Purdue university as well.
Hmm. Bummer. Wonder if it was the USB phone, or Skype itself?

SkyV
01-17-2007, 09:08 PM
wow,

my cousin has the triple play here in pittsburgh, $150.00 per month...Expanded basic cable, internet and phone service...GEE all to get ONE bill!!

24.99 vonage, 19.99 dsl, 43.99 DirecTv, 9.99 fax line (vonage)= $98.96/ Month....now who is the idiot here????

DSL?How much do you pay for phone line to keep DSL and Vonage running???You got to have phone line bill to have DSL at least live line.( around $17-20)

Skiid
01-17-2007, 09:16 PM
I think some phone companies you don't have to have the phone service to get DSL anymore.

Indiana WIFI
01-17-2007, 10:34 PM
That is correct. You can get just DSL with some phone companys now. I used Skype and it worked good for me this summer with usb phone and I used it with a headset also. Might not have been very compatible with isp you where using EZ.

dragon002
01-17-2007, 11:09 PM
the dsl is 19.99 , vonage is 24.99 and vonage fax is 9.99, I dont pay anything for the phone line. BTW my directv is 53.99

dragon002
01-17-2007, 11:09 PM
I think some phone companies you don't have to have the phone service to get DSL anymore.

correct.