Hughes On Market?

Television Digest with Consumer Electronics, Sept 11, 2000

GM is close to decision on possible sale of DirecTV. GM Vp Harry Pearce has acknowledged holding discussions about Hughes Electronics (HE) that includes DirecTV unit with number of suitors, including potential partners and prospective buyers. Pearce said final decision could come within "few months." GE spokeswoman said company indicated in May that it was stepping up consideration of divesting HE: "We are examining all of our options. There is no definitive timetable other than it's now a matter of months and not years."

Decision to entertain offers for HE was reversal of position for GM and Pearce, who said last year he wanted to hold on to HE to help consolidate evolving technology and new communication features GM planned to put in cars. "What we would expect is a spin-out of Hughes, but not someone acquiring Hughes," said analyst William Kidd of C.E. Unterberg Towbin: "That would benefit their shareholders. We don't want to see acquisition prior to its being spun out."

Sources said HE had talked with News Corp. Chmn. Rupert Murdoch, rumored earlier this year to have interest, and Walt Disney Co. on possible sale. Officials wouldn't confirm or deny speculation about buyers, but Pearce did say company "expects a substantial premium" for HE if it's sold. DirecTV spokesman said company couldn't comment on "rumor" or "speculation."

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Comcast reached agreement with NBC for carriage of latter's Olympic Games coverage on CNBC and MSNBC, terms not announced.

NAB's DTV task force meets 2nd time Sept. 13 at assoc-

iation hq with goal of working toward broadcaster consensus on issues such as DTV modulation, DTV-cable interoperability, FCC auctions of broadcast spectrum and DTV must-carry, Chmn. Michael McCarthy said. Issues are "thorny," said McCarthy, Belo senior exec. vp, and there's no firm timetable for decision. Some in industry are hoping for consensus on some issues, such as modulation, as early as NAB board meeting in Jan., but it's not clear whether latest round of testing will be done in time for that. DTV transition issues are made more difficult by number of players involved, McCarthy said, including broadcasters, consumer electronics companies, govt., Hollywood. Even broadcasters sometimes are divided depending on stations' market size or progress to date in transition, he acknowledged: "We're just really getting started." DTV task force is operating independently of NAB/MSTV group overseeing latest round of DTV testing, but McCarthy said results of tests "obviously will be keenly reviewed" by task force.

Sen. Leahy (D-Vt.) opposed call by Senate Majority Leader Lott (R-Miss.) for unanimous consent to go to conference on Rural TV Loan bill that has been languishing since different versions were passed by Senate and House in spring. There has been widespread concern that bill could die because no conferees have been named and there are just days left in 106th Congress. Floor exchange between Leahy and Lott was first sign that issue may yet be resolved before session ends. Leahy said bill's best chance of getting through this year was through avoiding conference. Senate could reach agreement with House "in the time it takes to get the conferees together," Leahy said. He said he was "concerned" conference would "delay process" until end of year, resulting in no action. Leahy said Lott and Senate Minority Leader Daschle (D- S.D.) should call meeting to "resolve issue" and "send clean bill" to House without "wasting time." Leahy predicted bill would be passed "very quickly."

Hearst-Argyle TV stations will make available at least 5 min. of air time nightly during campaign to candidates, company said. Program, involving 24 TV stations, is to take effect in Oct. Time is to be available during nightly newscasts.

This will be last Olympics in which TV network can limit Internet access, analyst James Grady of Giga Information Group predicted. NBC effectively has banned all Internet distribution of video from Games worldwide until after it's shown to American audiences on prime-time TV, Grady said, but others are questioning whether TV rights holders also get Internet distribution rights, since Internet streaming wasn't considered when Olympics TV rights agreements were signed. Grady said there was "no legal precedent" for such limits and there would be "a whole new environment" by Winter Olympics in 2 years. Among changes he predicted were: (1) Broadcast and Internet rights would be separated. (2) Broadcasters would have to change their strategies since Internet video would be available in competition to broadcast. Meanwhile, new AOL survey predicted that record number of sports fans would use Web to get Olympics information this month. Survey said 73% of Internet users planned to use Web to get Olympics information. However, it noted that 75% of Web users didn't want to see results on Internet before they watched events on TV. As result, AOL said it would offer users of its Web site option to access only delayed results.