EchoStar Communications Corporation Completes Acquisition of Assets from News Corporation, MCI WorldCom
LITTLETON, Colo.--(BUSINESS WIRE)--June 24, 1999--EchoStar Communications Corporation, ("EchoStar," NASDAQ: DISH, DISHP), announced today that it has completed the acquisition of high-power direct broadcast satellite (DBS) assets from The News Corporation Limited ("News Corp.," NYSE:NWS, NWS-A) and MCI WorldCom ("MCI," NASDAQ:WCOM).
Those assets include: the FCC license to operate a high-powered
DBS business at the 110 degree West Longitude orbital location
consisting of 28 frequencies; two high-power Loral-built satellites,
currently scheduled to be launched during 1999, to be delivered
in-orbit; and other related assets and rights.
The News Corporation Limited received 6,891,096 newly issued
shares of EchoStar Class A Common Stock and MCI WorldCom received
1,712,020 newly issued shares of EchoStar Class A Common Stock. The
total of 8,603,116 shares, which is approximately 14.6 percent of
EchoStar's fully diluted equity and approximately 2.6 percent of total
voting rights, reflects the agreed transaction value of approximately
$1.2 billion, based on the recent average price of EchoStar's Class A
Common Stock, reduced by approximately $45.6 million due from News and
MCI to EchoStar in fulfillment of certain obligations in the
acquisition agreement.
Consummation of the transaction gives EchoStar's DISH Network™
access to a total of 50 high-power DBS frequencies at 110 degrees W.L.
and 119 degrees W.L., capable of providing over 500 channels of video
and audio programming, Internet/data and HDTV to the entire
continental United States from a single 18-inch satellite dish. The
additional capacity also positions DISH Network to expand its one-dish
solution for local-to-local channels from Los Angeles and New York
currently, to over 50 percent of the U.S. population.
In addition, upon closing of the acquisition, the litigation
between EchoStar and The News Corporation was dismissed with
prejudice.
"This transaction strengthens EchoStar's position as an
alternative to rising cable prices and poor cable service," said
Charlie Ergen, CEO and chairman of EchoStar. "DISH Network has
experienced record growth in 1999, and the completion of this
transaction will build on that even more. With this added capacity, we
plan to offer consumers even more choices like HDTV, interactive
television, Internet and data. 500 channels of television... all
delivered direct to homes through one small satellite dish."
EchoStar Communications Corp. includes three interrelated
business units:
- DISH Network is EchoStar's state-of-the-art DBS system that
offers customers over 300 channels of digital video and CD-quality
audio programming, fully MPEG-2/DVB compliant hardware and
installation.
- EchoStar Technologies Corporation (ETC, formerly HTS - Houston
Tracker Systems, Inc.), designs, manufactures and distributes DBS
set-top boxes, antennas and other digital equipment for DISH Network
and various international customers that include ExpressVu Canada and
Telefonica's Via Digital system in Spain. ETC also provides
uplink-center design, construction oversight and project-integration
services for customers internationally.
- Satellite Services provides the delivery of video, audio and
data services to business television customers and other satellite
users. These services include satellite uplink, satellite transponder
space-usage and other services.
DISH Network currently serves over 2.4 million customers. DISH
Network is a trademark of EchoStar Communications Corporation. HTS is
a trademark of Houston Tracker Systems, Inc.
DISH Network is located on the Internet at: www.dishnetwork.com
Statement under the Private Securities Litigation Reform Act of
1995: All statements contained herein, as well as statements made in
press releases and oral statements that may be made by us or by
officers, directors or employees acting on our behalf, that are not
statements of historical fact constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause our actual results to
be materially different from historical results or from any future
results expressed or implied by such forward-looking statements. Among
the factors that could cause our actual results to differ materially
are the following: a total or partial loss of a satellite due to
operational failures, space debris or otherwise; a decrease in sales
of digital equipment and related services to international
direct-to-home or DTH service providers; a decrease in DISH Network
subscriber growth; an increase in subscriber turnover; an increase in
subscriber acquisition costs; an unexpected product shortage;
impediments to the retransmission of local or distant broadcast
network signals which could result from pending litigation or
legislation; lower than expected demand for our delivery of local
broadcast network signals; an unexpected business interruption due to
the failure of third-parties to remediate Year 2000 issues; our
inability to retain necessary authorizations from the FCC; an increase
in competition from cable, direct broadcast satellite, other satellite
system operators, and other providers of subscription television
services; the introduction of new technologies and competitors into
the subscription television business; a merger of existing DBS
competitors; a change in the regulations governing the subscription
television service industry; general business and economic conditions;
and other risk factors described from time to time in our reports
filed with the Securities and Exchange Commission. In addition to
statements that explicitly describe such risks and uncertainties,
readers are urged to consider statements that include the terms
"believes," "belief," "expects," "plans," "anticipates," "intends" or
the like to be uncertain and forward-looking. All cautionary
statements made herein should be read as being applicable to all
forward-looking statements wherever they appear. In this connection,
investors should consider the risks described herein and should not
place undue reliance on any forward-looking statements.
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CONTACT: EchoStar Communications Corporation Judianne Atencio, Dir. of Communications, 303/723-2010
KEYWORD: COLORADO INDUSTRY KEYWORD: TELECOMMUNICATIONS MERGERS/ACQ