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Gemstar, Echostar settle up

Mon, 03/01/2004 - 7:00pm
Jeff Baumgartner

Gemstar TV Guide and EchoStar Communications were the latest to take a drag on the peace pipe, signing a new interactive program guide (IPG) deal that settles all legal disputes between the two companies.

Under the deal, EchoStar will pay $190 million in cash to use Gemstar's intellectual property and IPGs. The companies will also collaborate on a customized version of TV Guide On Demand. EchoStar also agreed to launch and carry the TV Guide Channel and extend a carriage deal for TVG Network.

"We're happy to put our disagreements with Gemstar-TV Guide behind us, and we look forward to working with the new Gemstar team," said EchoStar chief Charlie Ergen, in a statement.

Separately, EchoStar also agreed to acquire Gemstar's Superstar/Netlink Group LLC (SNG), UVTV distribution and SpaceCom businesses and assets for about $48 million in cash.

That portion of the agreement will enable Gemstar to monetize those businesses "which are not core to our strategic plans going forward," said company CEO Jeff Shell. Gemstar also agreed to purchase from Wisdom Media Holdings the minority interest in SGN that Gemstar did not already own for $15 million.

Some analysts predicted the settlement between Gemstar and EchoStar was coming. Gemstar and Pioneer Electronics (USA) Inc. ended their drawn out legal battle concerning IPG technology last week. At the time, Citigroup Smith Barney analyst Niraj Gupta predicted in a research note that it would likely signal the first of several legal settlements for Gemstar, which still has pending litigation with Scientific-Atlanta.

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