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Sat-ND, 25.2.97

RUPERTWATCH -- February 25, 1997
© Copyright 1996 by Dr Sarmaz

Welcome to yet another edition of RupertWatch, our daily newsletter solely
dedicated to the activities of the one and only global media magnate. Watch him
adding country by country to his almost global television empire on an exciting
journey around the world.



MORE MONEY FOR MR MURDOCH
Rupert Murdoch's News Corp. still has some spare cash on its balance sheet --
US$2.5 billion, to be exact. That figure doesn't mean too much as Mr Murdoch is
known for his predilection of spending loads of money for setting up new
ventures, preferably those with high start-up costs. As to that purpose, Mr
Murdoch's News Corp. plans to raise US$800 million in asset sales over the next
year or two, enabling the company to continue its heavy investment scheme
without eating into its cash reserves. But it's exactly that course that has
led investors to accuse Mr Murdoch of an a overly aggressive expansionary mode.

Those voices must have got so loud that they couldn't be ignored anymore.
Yesterday, he and 19 of his top managers presented their case to the first-ever
investor conference.
I wasn't there, of course, so I can't give you any details on that. However,
Reuters/Variety quoted State Street Research analyst Larry Haverty as saying
"You don't have a meeting like this without having some candy for the Street." 
The candy's called Echostar.


ECHOSKY
Mr Murdoch' News Corp. will buy 50 percent of EchoStar Communications Corp. in
a deal that is valued at US$1 billion. Half of it will be paid in cash;
EchoStar will receive News Corp. assets such as satellites (what satellites?!)
for the other half. (Interestingly enough, it's EchoStar which have a satellite
up and running while News Corp. and its partner MCI are still waiting for
theirs to be launched from Russia [cf. today's edition of Sat-ND which you will
receive as a complimentary copy with RupertWatch.]) EchoStar is expected to
spin off certain assets, including manufacturing and international businesses
to shareholders later.
Wave good-bye to American Sky Broadcasting (ASkyB) -- it's a thing of the past
even before it has started. MCI Communications Corp., Mr Murdoch's partner in
ASkyB, will acquire a portion of News Corp.'s stake in the venture, leaving
News Corp.'s ownership at 40 percent. MCI would hold a 10 percent stake while
EchoStar holds the remaining 50 percent of the venture. (MCI also owns 13.5
percent of News Corp.) The resulting digital TV alliance will launch in early
1998 and operate under the brand name Sky. (What did you expect?)
Observers noted that the deal was a matter of sheer necessity. Said Robert
Thomson, a TCI spokesman: "It's no surprise the two weakest players would
combine -- there were too many players for all of them to be viable."


WHAT'S NEW?
What exactly is the difference to all those digital ventures we already know?
Sky will use up to seven satellites, offering not just 100 or 200, but 500
channels including such of a local nature. Mr. Murdoch remarked that those
local channels being "spot-beamed" to individual markets will be one of the
most attractive features of the new Sky service.
However, as explained earlier (Sat-ND, 9.1.97,) this does not refer to new
satellite technology but just to digital encrypting and addressing which aren't
new features at all. On the contrary, the excessive use of it has already
raised the anger of many European viewers who suddenly were excluded from
broadcasts originating from neighbouring countries.
Combining the vast satellite capacities of ASkyB and EchoStar, Sky also hopes
to reach no less that 75 percent of all TV households by the end of 1998, a
figure that for the first time would pose a real threat to the U.S. cable
industry. So far, digital direct broadcast services have attracted just 4.5
million subscribers as opposed to 64 million cable subscribers in the USA.
"At that point, the cable guys will be calling for Dr. Kevorkian," remarked
Preston Padden, president of Worldwide Satellite Operations for News Corp. He
may have been a bit too hasty at that point: under existing laws, it is yet
unclear whether Sky may offer local programming at all. Besides, it's also
uncertain whether Sky can convince the rivals to Mr Murdoch's Fox network to
agree to be carried on the new service.


ECHOSTAR'S POINT OF VIEW
Interestingly, it's EchoStar that supplies the lion's share of satellite
capacity. The company has licensed a total of 91 transponders at 61.5, 110,
119, 148, and 175°W while Mr Murdoch's ASkyB partner has just 28 transponders
at 110°W at its disposal. On the other hand, the Sky service is expected to
rely heavily on Mr Murdoch's Fox unit for news, sports and entertainment
programming, as well as for a promotion and advertising. 
EchoStar Chairman Charles W. Ergen, who will keep his job, forced the industry
into a price war last summer, cutting hardware prices to from US$600 down to
US$200. Apparently, it didn't really work out for the company. It now reaches
some 350,000 to 430,000 subscribers depending on the source, but anyway less
than other services (which, admittedly, were launched at an earlier date.) 
EchoStar urgently needed several hundred million dollars to launch their
satellites ECHOSTAR 3 and 4. Ergen admitted that "We needed an alliance of some
kind, and we felt it was better to do it sooner than later." News Corp. is a
partner to his liking: "They bring content, they bring a brand and they believe
in the local broadcast strategy."


THE COMPANIES
-- Echostar Communications Corporation manufactures and distributes
direct-to-home (DTH) satellite TV products, offering a full line of products
and services including satellite dishes, integrated receivers and decoders,
programming, installation, and third party consumer financing for products and
services. 
-- News Corporation is the world's largest newspaper publisher with more than
100 newspapers and magazines. The company owns the U.S. Fox Broadcasting TV
network and the Asian satellite TV network Star Television. While News Corp.
has broadcasts interests all over the world, the company is a big player only
in the UK and Eire where it offers its pay-TV service BSkyB. Recent activity
was particularly noted in Japan where News Corp. is engaged in a digital TV
venture called JSkyB. News Corp. also has an option to take over 50 percent of
the Leo Kirch's fledgling German digital TV service DF1 but so far has
refrained from doing so.


GOLDEN WORDS
"Our goal is not to be complimentary to cable. We want to eliminate cable." 
Charles W. Ergen, EchoStar CEO



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Sat-ND 97-02-25 - Satellite and Media News

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INTELSAT 801 TO GO UP NEXT THURSDAY
Intelsat has confirmed the new launch date for its 801 satellite. As reported
earlier (Sat-ND, 19.2.97,) the launch had to be delayed due to a problem with
the Ariane-4 launcher and is now slated for February 27/28 (depending on the
time zone you live in.) The launch window is open from 00:16 - 01:10 CET (7:16
- 8:10 PM EST.)
INTELSAT 801 is the first of Intelsat's new VIII series, which features high
power C-band as well as high power capacity at Ku-band. This high power,
combined with the capability to connect spot beams to global beams, makes these
spacecraft particularly well suited for several applications such as: SNG
(satellite news gathering) operation, VSAT (very small aperture terminal)
networks, compressed digital video and thin-route and remote communications.
The satellite, which will deployed in the Indian Ocean Region at 64°E, will
also provide high power voice/data and video services.


KHRUNICHEV'S COMMERCIAL PLANS
Russia plans eight commercial Proton launches for foreign companies in 1997,
putting a total of 20 satellites into their respective orbits. A Khrunichev
Space Centre spokesman said the first of those launches would be in May with
AT&T's TELSTAR 501 on board. It will be followed by PanAmSat's PAS-5 (July,)
SES' ASTRA 1G (August,) Rupert Murdoch's SKY 1 (September) and ASTRA 2A. 
By the way: rumour has it that this bird will find its orbital position
occupied by another satellite -- SES' competitors Eutelsat claim it's theirs.
Rupert Murdoch hoped to start his digital venture for the UK from the very
position in question, 28.2°E that is, but he probably has enough spare capacity
on other ASTRAs to do it anyway.
Back to Russia where the last commercial launch for 1997 will take place in
December when an ASIASAT is to hit the skies. 
There will also be launches with non-geostationary satellites, explaining the
total of 20 satellites: Motorola's Iridium project has booked two launches for
seven satellites each at a time.
Six of the launches will be made on behalf of ILS, the International Launch
Services venture set up by Lockheed-Martin and Khrunichev.


EUROSPORT SCORES
Eurosport came in first in a recent survey commissioned by the Pan-European
Television Research Group, which was set up by leading cable and satellite
broadcasters in Europe. 
The pan-European sports channel reaches 71.9 million cable and satellite
households in Europe. CNN International came in second with 59.7 million
viewers; and the bronze medal goes to NBC Europe which beat TV 5 and MTV
Europe. (TV 5 broadcasts in French, a language not too popular in the rest of
Europe; MTV Europe is not freely available at all, just in cable networks that
in turn charge their subscribers for access to the channel.)
Eurosport said it reached 44 countries and is watched by 17 million viewers
every day. The channel has its stronghold in Germany where its technical reach
extends to 26.8 million households. However, while being freely available there
and in a few other countries, most of Eurosport's commentary audio channels are
encrypted, thus allowing only cable subscribers to view the channel especially
in smaller European countries.


EBU TO LEND RTVBIH A HAND
The members of the European Broadcasting Union EBU have recently taken action
to help their fellow-broadcaster RTVBiH in Bosnia-Herzegovina. 
"Efforts made to date by the international community to help Bosnian
broadcasting to recover from the hostilities have not been as successful as
hoped," said EBU Secretary General Jean-Bernard Munch. "It is time for the
Union, drawing on its know-how and long tradition of solidarity, to help that
country establish a prosperous and independent public service television."
The assistance plan calls for remitting the broadcaster's debts as well as for
the supply of free programming over a period of a year. EBU members, national
European broadcasters that mostly operate under a public service remit, are
also looking into the possibility of  setting up joint productions. 
The EBU itself will ensure that RTVBiH remains linked to its international
satellite programme distribution network (Eurovision) and continues to receive
all the assistance necessary to promote its technological development, such as
training seminars.


LORAL BUYS SS/L
Loral Space & Communications Ltd has completed negotiations for the acquisition
of the remaining 49 percent minority interest in Space Systems/Loral (SS/L),
thereby increasing its ownership to 100 percent. Loral, which previously had a
51 percent interest in SS/L is to acquire the 49 percent interest held by its
four European alliance partners Aerospatiale, Alcatel Espace, Alenia Spazio
S.p.A. and Daimler-Benz Aerospace AG (DASA). They will continue their working
relationship with SS/L in the marketing and manufacture of satellites. 
In exchange for their interest in SS/L, the partners, with the exception of
DASA, will receive equity securities in Loral and will retain participation on
SS/L's board of directors. DASA elected to receive a cash payment for its
interests. SS/L will now be a wholly owned subsidiary of Loral and its
financial results will be fully consolidated with those of Loral. Space
Systems/Loral is designing and manufacturing telecommunications, weather and
direct broadcast satellites. 



=========================================================
Copyright 1997 by Peter C. Klanowski, pck@LyNet.De. All rights reserved.

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