EchoStar CEO "More Hemmed In Than Ever"

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HEARD ON THE STREET: EchoStar May Chart New Path

• Summary: With Rupert Murdoch's announcement last week that News Corp. (NWS) may trade its stake in DirecTV (DTV) to Liberty Corp (LCAPA) in exchange for their holdings in NWS, the satellite media industry took a beating from analysts and the market. Liberty Corp's John Malone has apparently been looking for a satellite holding for years, and is expected by analysts to invest heavily in subscriber growth if the deal goes through. Increased competition from DirecTV, the cablecos and telcos compounded by a recent loss in a patent infringement suit to TiVo make some analysts think that it will be difficult for Echostar (DISH) to avoid a takeover. EchoStar and its CEO Charles Ergen have a loyal following on Wall Street, particularly among institutional investors. But as Jimmy Schaeffler, California satellite consulting firm Carmel Group says, a $100 million partial settlement with the television networks and an unsettled sum to be paid out to TiVo (TIVO) mean that Ergen "is more hemmed in than ever".
• Comment on related stocks/ETFs: See Rob Zenilman's analysis of the rationale behind the Murdoch-Malone deal. Andrew Schmitt looked at the implications of the EchoStar-TiVo infringement suit. See DTV's DISH's quarterly conference call transcripts.

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