Hughes Romances News Corp for LatAm Liaison

16 October 2002

In what could be the start of a beautiful romance – leading even to marriage, some speculate – Hughes Electronics has proposed a Latin American liaison to News Corporation.

Both companies have satellite broadcast interests in the region and both have posted losses, Hughes-owned DirecTV to the tune of $13.6 million (€13.85m; £8.74m) in this year’s third quarter compared with an eyewatering $227.2m for the year-on-year period.

NewsCorp operates mainly in Mexico and Brazil where it has a 36% controlling holding in Net Sat, while Hughes broadcasts in over twenty Latin America nations.

Conscious of the region’s deteriorating economy and currency convulsions, Hughes’ top brass are ogling their opposite numbers at NewsCorp suggesting collaboration or outright merger. “We will have more on that, hopefully in the near future,” Eddy Hartenstein, Hughes’ svp, confided to analysts.

Commented one informed onlooker, Jim Stroud of broadcast consultancy Blackbird Communications: “There probably is no better way for Hughes to reach out [to NewsCorp] and signal it may be ready to begin a serious discussion [about merger prospects in the wider world].

Data sourced from: The Wall Street Journal Online; additional content by WARC staff