Late yesterday, Echostar, the third largest pay-TV provider in the United States, announced that it is to purchase Sling Media in a cash and options deal which values the company at $380 million.
Sling Media is best know for its SlingBox, a place-shifting device which connects to a home’s TV signal (cable box, digital tuner or PVR) and then ’slings’ that signal over a broadband connection to either a PC or cell phone, or in theory, any Internet connected device that can run the SlingPlayer software. More recently, however, the company formed its Sling Entertainment Group to develop a variety of software-based services including the controversial Clip+Sling. Last week, it was reported that Sling had partnered with DirectTV to provide the software behind its newly launched out-of-market NFL Internet streaming offering.
In a post titled ‘SlingBox: television networks’ friend or foe?‘, we’d previously noted that Sling’s products have come in for criticism from the television networks and other major content providers, for the way they push the boundaries of existing IP laws. Since Echostar’s DISH satellite network competes directly with a number of the companies who’ve expressed reservations over Sling’s technology, as well as some of Sling’s existing partners and early investors, such as DirectTV, it could be that the acquisition has the effect of upping the anti. Additionally, Echostar will be seen to have much deeper pockets compared to Sling Media alone, which, in combination with its lack of independence, might be enough to trigger a round of aggressive law suits.
Staci D. Kramer, over at paidContent, raised the issue of post-acquisition lawsuits with Blake Krikorian, co-founder, chairman and CEO of Sling Media. The plan, said Krikorian, was to remain “operator agnostic”:
“I think our relationships with the various content players, we’re all beyond that at this point. I think they at this point really understand we are somebody more on the friend than the foe side.”
One option being explored is to split Echostar into two publicly traded companies, one focusing on its consumer pay-TV business DISH Network and the other on its technology and infrastructure businesses. In a statement released this morning, Charlie Ergen, Chairman and Chief Executive Officer of EchoStar said: “We believe separation of our consumer-based and wholesale businesses could unlock additional value. Each company would be able to separately pursue the strategies that best suit its respective long-term interests.”
Seperating Sling Media’s activities from Echostar’s television business would certainly go some way towards selling Krikorian’s “operator agnostic” pitch of Sling’s various technology offerings.