Primestar's new CEO, Carl Vogel, moved quickly to restructure the company he began leading June 10 with his recent decision to cut 275 out of 2,200 corporate jobs. Three senior vice presidents are among the departing employees: Denny Wilkinson, marketing/programming; Joel Ginsparg, technology/operations; and Michael Merritt, CIO. Vogel had tipped off his plans during a press briefing in late July at the Satellite Broadcasting and Communications Association (SBCA) annual conference in Nashville (SN, July 24). He acknowledged at the time that the organization was struggling to meld together the five partnerships that previously operated independently under the Primestar name prior to the April 1 rollup of all the units into a single company.
Jimmy Schaeffler, who heads The Carmel Group consulting firm, said the cuts will trim costs and may help Primestar find a buyer or major financial backer.
Primestar could be an attractive investment for a broadcaster, satellite operator or investment company looking to complement existing operations with a business that has two million medium-power direct-to-home customers. However, Primestar has begun to grow more slowly than its direct-powered rivals that allow subscribers to use an 18-inch satellite dish instead of a 36-inch dish. Vogel is focused on gaining the necessary regulatory approval to upgrade Primestar's medium-powered service to high power.
A major hurdle continues to be a lawsuit filed by the U.S. Justice Department (DoJ) to block Primestar from gaining access to the high-power orbital slots the company needs to upgrade its service. Vogel is searching for a company to buy controlling interest in Primestar, which is now held by five of the largest U.S. cable TV operators. The DoJ wants the orbital slots to be used to compete against cable TV operators. Elimination of Primestar's cable ownership may end the lawsuit and win U.S. government approval to transfer the orbital slots.