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DirecTV Receives $51.5 Million Judgement

By | April 19, 2004

      El Segundo, Calif.-based DirecTV, a unit of The DirecTV Group [DTV], received welcome news last week when a federal jury awarded the satellite TV services provider $51.5 million in damages against Pegasus Satellite Communications [PGTV] for the breach of a joint marketing contract.

      The jury in the U.S. District Court for the Central District of California found DirecTV had substantially performed its obligations under a joint marketing agreement but it ruled Pegasus had breached the pact. The $51.5 million damage award equaled the amount Pegasus had not paid under the agreement, DirecTV officials said. Separately, the court will consider DirecTV’s request for pre-judgment interest in an amount in excess of $11 million.

      “We are extremely gratified by the verdict,” said Dan Fawcett, DirecTV’s executive vice president of legal and business affairs. “We believe the evidence in the case overwhelmingly showed that Pegasus failed in its responsibility to fairly reimburse DirecTV for certain of the subscriber acquisition costs that DirecTV had incurred for Pegasus’ benefit. Given the weight of the evidence, we were not surprised by the verdict.”

      In January, the same federal court ruled that a proposed settlement agreement between DirecTV and a class that consisted of certain members of the National Rural Telecommunications Cooperative (NRTC) was fair, granting final approval to the class-action settlement. Pegasus is not a party to that settlement.

      Pegasus has remaining claims against DirecTV that have yet to be resolved. A hearing on DirecTV’s motion to dismiss those claims is set for April 28.

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