Saddle for Pegasus
DirecTV buys subs in $875 mil horse trade
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DirecTV will pay $875 million in cash for all of Pegasus' satellite television subscribers in a deal that ends five years of litigation between the parties.
Deal also spares Pegasus from a long, slow death at the hands of Rupert Murdoch-controlled DirecTV.
DirecTV has had its sights on Pegasus subs for some time, but began pursuing them in earnest after Murdoch took control of the satcaster in December.
Pegasus had an exclusive contract to distribute DirecTV service in rural areas, but News Corp. management had become frustrated with continued subscriber losses.
"We have seen subscribers in those areas decline, and we think we can turn that around," said DirecTV spokesman Bob Marsocci.
Buyout gives DirecTV control of all its subscribers nationwide.
Tough competish
Pegasus filed for bankruptcy protection in June, after DirecTV won a court judgment allowing it to sell its own service in areas that had been exclusively served by Pegasus.
Ruling effectively removed what had been Pegasus' main asset, an exclusive contract with the National Rural Telecommunications Cooperative to resell DirecTV service in rural areas of 41 states.
In a court filing, Pegasus accused News Corp.-controlled DirecTV and the NRTC of attempting "to destroy" its business.
DirecTV also agreed to dismiss a $63 million judgment it won against Pegasus. Including the judgment, the purchase price was $938 million.
