Echostar and Gemstar-TV Guide Sign License and Distribution, Asset Purchase, and Settlement Agreements

3-Mar-04

Gemstar-TV Guide International, Inc. and Echostar Communications Corporation announced a long-term non-exclusive patent license and distribution agreement. The transaction includes a one-time payment by Echostar of $190 million in cash for Echostar to utilize Gemstar-TV Guide's intellectual property and technology as well as the TV Guide brand on its interactive program guides. Additionally, the two companies entered into distribution arrangements to provide for the launch and carriage of the TV Guide Channel as well as the extension of their existing distribution agreement for carriage of the TVG Network. Echostar and Gemstar also signed an agreement to resolve all outstanding litigation between the two companies. Separately, Echostar signed an agreement to acquire Gemstar-TV Guide's Superstar/Netlink Group LLC (SNG), UVTV distribution, and SpaceCom businesses and related assets for approximately $48 million in cash. Gemstar-TV Guide has also agreed to purchase from Wisdom Media Holdings Inc. the minority interest in SNG that Gemstar-TV Guide does not already own for $15 million in cash. The sale of the SNG, UVTV, and SpaceCom businesses to Echostar is subject to certain regulatory approvals and customary conditions. The effectiveness of the settlement, patent license and distribution agreements is subject to the closing of the sale of the C-band business. ìWe're happy to put our disagreements with Gemstar-TV Guide behind us, and we look forward to working with the new Gemstar team. EchoStar's DISH Network is a complete entertainment choice for American consumers, delivering a wide range of programming coupled with exceptional value. Gemstar-TV Guide has a great brand, strong technology and compelling content. This alliance will provide our customers a new programming choice with the TV Guide Channel and continued carriage of TVG Network. Additionally, we are pleased with our agreement to acquire Gemstar's C-band assets, and we believe that we can offer C-band customers more choices with DISH Network.î said Charles Ergen, Echostar chairman and CEO.ìThis agreement allows us to put our differences with Echostar in the past and start working with one of the visionaries in the pay television industry to make it easier and more enjoyable for their subscribers to choose what to watch among an exploding number of programming choices,î said Jeff Shell, CEO, Gemstar-TV Guide International. ""Further demonstrating the value of our technology, intellectual property, brand and content, the agreement is also important for our TV Guide Channel. Its launch on Echostar will push the channel close to 80 million subscribers. I am also pleased that we will be able to monetize our C-band, UVTV and SpaceCom businesses, which are not core to our strategic plans going forward. We have consistently said that if we could find a buyer that placed a high enough value on SNG's subscribers, then we would welcome a sale of the business. While the C-band businesses have been extremely well managed by an outstanding team, they are clearly now more valuable to Echostar than they are to us.îEchostar plans to launch the TV Guide Channel on its most widely distributed programming package, ìAmerica's Top 60.î The TV Guide Channel recently introduced a broad range of new programming, on-air branding, studios and talent, establishing the network as the premier destination for TV viewers who seek recommendations and information on the best programs, hottest stars and latest trends on television. With its vast library of interviews and exclusive behind-the-scenes access, TV Guide Channel provides viewers with a rich array of program information and recommendations to help them make the most of their television experience. In addition, Echostar and Gemstar-TV Guide will work together to create a customized version of TV Guide On Demand, which will run within the parameters of satellite technology and is designed to bring new levels of guidance and information to EchoStar's customers. Echostar will also extend the term of its distribution of TVG, the country's premier interactive horse racing network. TVG is currently included in EchoStar's basic tier ìAmerica's Top 60î package.Additional information about Gemstar can be found at www.gemstartvguide.com. For more information on EchoStarís DISH Network, please visit www.dishnetwork.com.

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