Direct-broadcast satellite veteran Carl Vogel's
appointment last Wednesday as chairman and CEO of PrimeStar Inc. gives him a
"significant" equity stake in the newly rolled up company, he said.
"It's enough to change my lifestyle," Vogel
said, declining to go into specifics of his package, "and I have a nice lifestyle
right now."
Vogel's appointment itself may help PrimeStar in
Washington, D.C., at least a little.
"I have a history of being willing to compete with
cable, both here and in Canada, for whatever that's worth," Vogel said,
"and I think that's worth something."
Vogel was president of PrimeStar rival EchoStar
Communications Corp. until March 1997. Most recently, he has served as CEO of
Canadian-based DBS firm Star Choice Communications.
Vogel said he is also encouraging other PrimeStar
executives to strike similar deals. "If we treat people like owners, they'll act
like owners," he said.
The ownership stake gives Vogel a strong incentive to
breathe new life into the beleaguered company, which has seen subscriber numbers for its
medium-power satellite service stagnate in recent months.
But those who have seen Vogel in action said his drive to
win also goes a long way toward ensuring that PrimeStar will compete aggressively against
cable, and not just against its DBS rivals.
"Carl won't be content to be a senior statesman
or a nonexecutive chairman," said Steve Blum, president of California-based Tellus
Venture Associates.
Vogel said he expected to have as much authority as he
would like at PrimeStar, and he will be "very involved" in deciding who
PrimeStar's new owners and board members will be.
PrimeStar's current cable partners will likely need to
dramatically reduce their ownership in the company if PrimeStar is to evade an antitrust
suit that the Department of Justice filed last month . The DOJ is seeking to block
PrimeStar's merger with American Sky Broadcasting Inc., the DBS arm of News Corp. and
MCI Communications Corp., which would give PrimeStar much-needed high-power slots.
Time Warner Inc. chairman Gerald Levin told reporters in
Los Angeles last week that the company would be willing to decrease its claim to PrimeStar
if that would help the company to get federal approval.
When asked how soon he expected to resolve the DOJ matter,
Vogel replied, "We don't need to let a lot of grass grow beneath our feet,"
adding that much of that timing is out of PrimeStar's control.
Mickey Alpert, president of Washington, D.C.-based Alpert
& Associates, said he doubted that PrimeStar's "white knight" would be
minority partner GE Americom, which some have rumored would increase its share to as much
as 33 percent.
Vogel would not comment on the possibility that PrimeStar
would strike a deal with Loral Space and Communications Corp.
"My goal is to bring as many options to the board as
possible," Vogel said. "I don't think that there's any single answer
or silver bullet out there."
Analysts see a move to high-power DBS as crucial for
PrimeStar's ability to move its business forward. But Vogel said he would not back
away from his position if the government denies PrimeStar access to high-power spectrum.
"Our business would be outstanding at high
power," Vogel said. "Our business can be a great business at medium power. There
aren't that many 2 million-subscriber TV businesses in the world, much less in the
United States."
Vogel said PrimeStar already competes successfully at
medium power. "We have to do something about churn," he added, "but with
acquisition numbers, we're doing very well."
PrimeStar signed 70,000 new subscribers in May, but it lost
65,000 to disconnects.
Vogel said he will maintain his seat on the Star Choice
board of directors. Because there are so many similarities between Star Choice and
PrimeStar, he added, "there could be opportunities for the two companies to work
together."
Bob Berzins, DBS analyst with Lehman Bros. Inc., wondered
whether Vogel's appointment will produce an exodus of people from EchoStar.
"It's way too early to anticipate what I can and
can't do with the management team," Vogel said last week.
