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Weil, Gotshal & Manges LLP
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The DIRECTV Group, Inc.
Sale of PanAmSat Corp.
With almost 14 million customers in the US, DIRECTV is the nation's largest satellite TV company, but becoming a media powerhouse has highlighted how important it is to stay in tune with the customers whose subscriptions are vital to the company’s success. In the media industry, "knowing your customers" does not mean merely collecting reams of market data; rather, it's about a philosophy of service – it's about a whole corporate culture.
Creating and maintaining the customer-driven corporate culture so important to media companies requires determination and a tight focus on the core mission. This was the principal motivation for DIRECTV's $4.3 billion sale of PanAmSat to an affiliate of Kohlberg Kravis Roberts & Co. In shedding PanAmSat – one of the top satellite operators in the world with a fleet of 24 satellites – DIRECTV exited a non-core, capital-intensive business, enabling it to devote more resources to its core digital television services. Weil advised DIRECTV on the deal, but the company's drive to focus on providing the best service possible to its customers was not limited to the PanAmSat transaction.
Weil also advised DIRECTV on its purchase of the primary direct broadcast assets of Pegasus Satellite Television, Inc., which included the rights to all DIRECTV subscribers activated through Pegasus. Since approval for the deal was needed from the creditors' committee in Pegasus' Chapter 11 proceedings as well as the US Bankruptcy Court, Weil augmented its regular corporate and tax teams with lawyers from the firm’s Business Finance & Restructuring practice to ensure a timely and successful resolution.
By the end of 2004, DIRECTV increased its potential subscriber base by over ten million homes and more closely aligned its business with the needs of its primary market as a result of these transactions.
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