Filed by Echostar Communications Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Companies: Hughes Electronics Corporation
Commission File No. 0-26035
General Motors Corporation
Commission File No. 1-00143
Date: November 16, 2001
In connection with the proposed transactions, General Motors Corporation (“GM”), Hughes Electronics Corporation (“Hughes”) and EchoStar Communications Corporation (“EchoStar”) intend to file relevant materials with the Securities and Exchange Commission, including one or more Registration Statement(s) on Form S-4 that contain a prospectus and proxy/consent solicitation statement. Because those documents will contain important information, holders of GM $1-2/3 and GM Class H common stock are urged to read them, if and when they become available. When filed with the SEC, they will be available for free at the SEC’s website, www.sec.gov, and GM stockholders will receive information at an appropriate time on how to obtain transaction-related documents for free from GM. Such documents are not currently available.
GM and its directors and executive officers, Hughes and certain of its officers, and EchoStar and certain of its executive officers may be deemed to be participants in GM’s solicitation of proxies or consents from the holders of GM $1-2/3 common stock and GM Class H common stock in connection with the proposed transactions. Information regarding the participants and their interests in the solicitation was filed pursuant to Rule 425 with the SEC by EchoStar on November 1, 2001. Investors may obtain additional information regarding the interests of the participants by reading the prospectus and proxy/consent solicitation statement if and when it becomes available.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
The following is a transcript of a television broadcast that first aired on November 12, 2001. The slides used in connection with the broadcast follow the transcript.
Charlie Chat 11-12-01
Transcript of Charlie Ergen
Well it’s gonna be great news for everybody. I think that obviously you have read in the press General Motors’ Hughes Electronics has agreed to merge with EchoStar, which of course is the parent company of DISH Network, and they’re the parent company of DirecTV so it’s the two main satellite broadcasters that are out there and by merging these two companies together we are going to be able to improve our service to you hopefully at lower cost and with a lot more channels and things you might want as customers. The kind of questions and emails we get everyday are the kinds of things you’re asking for everyday. For example, in the new company, we are going to be able to move from about 36 cities that we have today from local to local to the top 100 markets in the United States of America. So here’s what we do today [showing map] and here’s the local to local cities. We probably get more mail on this than anything else that we do as a company. Because the two companies duplicate the cities and duplicate the bandwidth that we use from satellite, we can do more cities. So for example, in the western part of the United States, [showing map] here’s existing markets in the white but here’s the kind of markets we will be able to do. We’ll get people in Hawaii, Alaska who want local to local or places like Oklahoma city or Spokane where we just can’t do it because we just don’t have the bandwidth. Now we can bring true competition to cable companies into those areas [showing Northeast]. You can see the existing cities and quite a few new cities most likely and again there could be somebody who is in the 103rd best market instead of the 97th best market but in general it’s the top 100 markets that we’re going to be able to do. So you can see quite a few new cities. I know people in Kentucky, Lexington. They want to know where their local channels are in the Southeast. A few channels are there today, but obviously we can expand in states where we don’t have like Jackson, Mississippi, states where we don’t have any local to local at all. For example, we’ll offer channels to New Orleans and Louisiana, so a lot of states that we don’t do today. So again we’re bringing true competition so those cable rate increases aren’t as high.
That’s an amazing advantage but there are other advantages as well in
terms of combining all of this. We’re going to be able to do more HDTV
channels. Today, we do three or four channels each in terms of HDTV but we
don’t have critical mass. But we get lots and lots of requests for more
HDTV channels, so we think we can do a dozen channels in high definition
television. We can add interactive channels so you can order your pizza, do
in-home banking through your satellite service. These are things we can’t
do without the ability to have the spectrum to do it. And finally, the thing we
are getting the most questions about today is: How do we get high speed Internet
access particularly in rural America? By combining our customer base and taking
into consideration that we both have multi-billion dollar investments in high
speed access, we can spread that cost over our subscriber base and actually cut
the cost of our investment in half. If we can do that, we can lower the cost of
high-speed access to America, particularly in rural America and make it
competitive with what the folks that have cable. So there’s no reason that
somebody growing up in rural America shouldn’t have the same access to
educational internet opportunities that someone in Boston may have and
that’s just not going to ever happen unless we’re able to do this. So
those are the kinds of things we can do. Finally, we’re able to negotiate
on a more level playing field with the programmers. ESPN for example has raised
our rates at 20% each and every year for three years. So by combining our
subscriber bases, we are at a more level playing field when it comes to
negotiating those price increases so that hopefully we don’t have to raise
your prices at rates higher than inflation year after year like the cable
companies do today. We recognize that in some places in rural America, there may
be a choice of satellite providers today and that choice may be limited with
this merger. So that has caused some people to have concern. What we have said
is we are aware of that. We are certainly sensitive to that subject. We have
agreed that we would go to nationwide pricing so that no matter where you live
it’ll be the same price in America so those folks who live in rural America
will get the very same price as the competitive price that’ll be in the
market place where cable and cable over-builders are dominant forces. So we are
excited about that. We think it addresses a lot of the questions that you guys
keep asking us in terms of how we’ll improve our service, and it really
reduces our cost as a company. And if we can reduce our cost we can pass those
savings on to you in the form of lowering pricing that otherwise would be so.
Q. With the pending purchase of DirecTV has
EchoStar Corporation looked into a pick-a-pack type of programming to compete
with cable? A. We’ve done some of that in the past and
we certainly put as much flexibility into our programming packages as we
possibly can in terms of, we have three or four main packages and we have lots
of sub-packages. You can pick off of that of course additional things you have
with local television. That doesn’t change a lot in terms of the merger
because we don’t have a lot of added flexibility and the reason is your
programmers. When you write your programming contract you’re really forced
to put a lot of packaging together in your packages. They don’t let you
sell it à la carte. For a single service, we will have a level playing field in
those negotiations. I am not optimistic that we’ll have more flexibility.
It’s possible and we would certainly like to do that but we know we have
the most flexibility in the industry today. I don’t think that will change.
Whether we get more flexibility is unknown at this point. Q. Channel 131 and the International Romance
Classics, are they gonna be on two separate channels like DirecTV? A. OK, prior to the merger of course we had them
all on one channel so they share the space and we expect that’s gonna
continue at the time of the merger we will have enough capacity and we will
split those apart into two channels. To that extent those will be separate
channels after the merger. Q. What about folks who have
systems, DISH Network hardware, will they have to change anything and will it
cost them? A. Nope, you don’t have to do anything --
that’s the good thing. Actually, the merger will not cause you to buy new
equipment. Obviously there could be new services like High Definition
Television, and you may have equipment that does not get HDTV today. It’s
possible if you want the new service like HDTV you would have to make an
investment in that, and a new television set does not include a set top box in
it. Then you may have to buy a new receiver but in terms of all the programming
that you get today -- absolutely nothing that you have to do in terms of new
equipment. We’ll give lots more information as the merger progresses. It
will take about nine months for this to go through the regulatory process. There
are two parts of the government that have to approve this transaction. One is
the Justice Department which looks at all the anti-competitiveness and
competitiveness effects of this and makes sure this is good for consumers, and
the Federal Communications Commission where we have to transfer some licenses in
terms of the DBS spectrum. So they have to look at this as well but they look
out and protect the consumer. They certainly in this case do that and
unfortunately the wheels of the government take longer than we all like. So you
really won’t see any difference for about nine months. After that you will
see some of these new services with the added spectrum that’ll be
available. Q. What kind of time frame could we expect to
see additional content and actually the additional local cities and so on? A. Well the very first thing we would see upon
the effect of the merger will be local channels in more local markets,
that’s the first thing. Of course that will affect some of those folks that
we saw in the top 100 market that aren’t carried today. That you’ll
see immediately. You’ll probably see more HDTV content immediately. Longer
term, as we consolidate into one standard system then you’ll see an opening
for a lot of the additional services the inter-activity and so on. The broadband
of course both companies are making an investment into that today and those new
satellites specifically designed for high-speed broadband we’ll be able to
continue to fund development into those and those will launch in 2003 and be
readily available in 2004. That’s the kind of a time frame for that.
There’s gonna be an immediate impact upon the effect of the merger and
there will continue to be benefits in the merger for several years after that as
we consolidate the two systems together. Q. RE: Must-carry. January first was the date that
was mentioned. What’s the status on this? A. Well we didn’t do so good in the local
to local because obviously the must-carry started in January. It’s about
the 36 markets we have worth about over 200 channels we will be putting up in
January first because of the must-carry. Most of those channels are ones that
are not heavily watched and not heavily viewed and have not been requested by
our viewers. Some of those channels have been requested and we are glad to put
those up. We’ll have a lot more detail about it on our next Charlie Chat in
December. As we finalize those line ups we’ll go city by city at the end of
that chat so you can see new channels that are gonna be coming up in terms of
must-carry. In general we’ll have the major networks; ABC, NBC, CBS and
Fox. WB is now considered a network and PBS.
Those you can expect to have in every market. Some markets have UPN, many
markets have independent channels such as Home Shopping channels, religious
channels or perhaps an independent channels that show old movies. Some of those
channels will be going up as well. In general, everything you watch more than an
hour or so a week of, you can expect to be up on DISH Network in those 36
markets. Unfortunately, we are unable to add a lot of new markets because of the
channels that are taken up by these must-carry channels. That’s why we need
to get that capacity and merge these two companies together. Unfortunately the
same 36 markets we do in general, DirecTV does exactly the same market because
those are the biggest cities. That’s unfortunate in America, if we try to
make a profit we’ll have to go where the people are and the people are in
big cities. Of course it’s been our objective really since we stared
EchoStar twenty-one years ago. We want to be cognizant in rural America and
smaller cities and make sure you have the same opportunities as people in the
big cities do. Q. How does the merger affect Puerto Rican Dish
Network programming? A. I haven’t thought about that one in
terms of Dish Network/Puerto Rico. I don’t expect anything will change but
realize that DirecTV has a service called DirecTV Latin America, which is, has
been in Puerto Rico and is the dominant service in Puerto Rico. Obviously it
maybe frees up capacity to do a better job in Puerto Rico. It’s actually
one I hadn’t looked at. I know they have a bigger service in Latin America
that has few more channels than what we are able to provide today from Dish
Network. Q. Since DirecTV has introduced DSL Internet
access using their existing satellite dish system, when will Dish Network be
making such DSL access available to its customers? A. Again, with the merger they have a common
telocity which in the merger process will be our DSL provider, of course we hope
to also provide DSL with some partners such as the regional phone companies that
also have DSL available. It’s not our primary business. There’s a lot
of capital investment that goes into DSL. Particularly we like to partner with
people who are in that business and combine them into one bundle with the video
product and the core service that we’ll try to provide will be satellite
delivered to a service. It’s very comparable to a DSL service or cable
modem service but the advantage to that particular service is it will go over
every square inch in the United States. So no matter where you live, that
service will be available. As you know DSL is only available typically every
mile or two miles of a central office where the equipment is put in so the vast
majority of Americans today don’t have access to high-speed DSL. Q. Why have we chosen to use the DirecTV brand
name? A. Well the DirecTV brand name has been around a
bit longer about two and a half years than we have. It’s a more
recognizable name in a market place. They’ve done a great job marketing
that brand name. So that’s the reason to keeping that name. It’s
possible that the Dish Network in certain locations will still be used and the
company will be called EchoStar. General Motors’ Hughes will become EchoStar but
the brand name
Q. The NAB has said the merger EchoStar/DirecTV
would create the world’s largest monopoly video system and the NAB urges the
government to review the proposal with a high level of scrutiny. How do you
respond to this? A. Well first of all I agree with the
broadcasters that the government should review the merger with a high degree of
scrutiny and of course they only have one question to ask. Is this gonna be
better for consumers particularly in rural America than if we didn’t do the
merger? I think when the facts are on the table the answer to the question is
yes. If I didn’t believe it I certainly wouldn’t be recommending this
to our shareholders and put our country in a position to do this. I don’t
agree in these kind of circumstances there would be any kind of monopoly at all.
We compete against cable companies across the country over 96% or 97% is passed
by cable so probably almost nobody watching this tonight doesn’t have the
opportunity to subscribe to cable if they’d like to. The cable industry has
81% of the pay television market. Even if we combine our two companies
we’ll only have 17% of the pay television market. We’re gonna be a
small fish in a big pond against cable but we are fighting cable with one hand
tied behind our back as individual companies. I think we’re gonna be a more
formable company/competitor to cable industry when we go together. The
broadcasters aren’t gonna be too happy as having a level playing field when
we negotiate retransmission rights. In other words, how much we pay for their
programming. They certainly won’t like that because it’ll be a level
playing field. The broadcasters themselves will receive some digital spectrum
from the United States government for free. They (broadcasters) can use for the
pay television business themselves. They’re gonna be newly entered into
this marketplace to compete with us as well. Typically what happens in business
particularly in Washington, the companies who are members of the club and the
people who have been in business for a long period of time don’t want
competition to come against them. They know they have to work harder. They know
they have to actually compete on their service and their price. A lot of people
who have been in the good ol’ boys club and haven’t had to compete and
the broadcaster/cable company industry aren’t gonna be happy about this
merger. You should worry about what’s gonna be good for you or not, for
your service, the price you pay, the new services and whether or not you’ll
get new services no matter where you live. I think when you analyze it,
it’ll be really good for our viewers and for people who have cable in
broadcast networks today. Q. With the merger will the DirecTV customers
have to buy new equipment? A. No they will not. Again, unless they’re
HDTV or something different that their hardware does not provide today they will
not. No matter which standard that we ultimately decide is the best standard
going forward in satellite they will not have to purchase new equipment. They
may need new equipment but we’ll make sure that’s available free of
charge to the consumer. Our goal is to make sure all of our customers whether
they be DirecTV or Dish Network are gonna get more services hopefully at a
lower price than they otherwise would get them. They don’t have to pay
for upgrade equipment to receive what they receive today. That’s kind of a
standard that’s in concrete that we are not gonna vary from. Q. Will Dish Network offer NFL Ticket next
year? A. I think that’s another great example of
why it’s good for consumers because DirecTV does have some programming
particularly NFL that we don’t have. Yes, the answer is yes. The product is
available as long as the merger is approved by the regulators. DirecTV only has
one more year in their contract so we can’t make predictions about
what’s gonna happen in 2003 and beyond because I’m sure that contract
will have to be renegotiated. Obviously it’s a larger company with a bigger
base we’d be in a better position to negotiate a longer term deal for the
sports programming. Anything that’s on DirecTV today post-merger as long as
it’s still in force will be available on Dish Network vice versa a lot of
folks particularly in international programming that we show. The DirecTV folks
would like to have the programming. It’s not available today after the
merger it will be. Materials included in this
document contain “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
could cause our actual results to be materially different from historical
results or from any future results expressed or implied by such forward-looking
statements. The factors that could cause actual results of GM, EchoStar,
Hughes, or a combined EchoStar and Hughes
to differ materially, many of which are beyond the control of EchoStar, Hughes
or GM include, but are not limited to, the following: (1) the businesses of
EchoStar and Hughes may not be integrated successfully or such integration may
be more difficult, time-consuming or costly than expected; (2) expected benefits
and synergies from the combination may not be realized within the expected time
frame or at all; (3) revenues following the transaction may be lower than
expected; (4) operating costs, customer loss and business disruption including,
without limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers, may be greater than expected following the
transaction; (5) generating the incremental growth in the subscriber base of the
combined company may be more costly or difficult than expected; (6) the
regulatory approvals required for the transaction may not be obtained on the
terms expected or on the anticipated schedule; (7) the effects of legislative
and regulatory changes; (8) an inability to obtain certain retransmission
consents; (9) an inability to retain necessary authorizations from the FCC; (10)
an increase in competition from cable as a result of digital cable or otherwise,
direct broadcast satellite, other satellite system operators, and other
providers of subscription television services; (11) the introduction of new
technologies and competitors into the subscription television business; (12)
changes in labor, programming, equipment and capital costs;
(13) future
acquisitions, strategic partnership and divestitures; (14) general business and
economic conditions; and (15) other risks described from time to time in
periodic reports filed by EchoStar, Hughes or GM with the Securities and
Exchange Commission. You are urged to consider statements that include the words
“may,” “will,” “would,” “could,”
“should,” “believes,” “estimates,”
“projects,” “potential,” “expects,”
“plans,” “anticipates,” “intends,”
“continues,” “forecast,” “designed,”
“goal,” or the negative of those words or other comparable words to be
uncertain and forward-looking. This cautionary statement applies to all
forward-looking statements included in this document.
will be DirecTV that’s the thinking that will be going in and it’s
mainly because it’s a better known brand name. I can assure you that the
customer service and the rest of the network you will not see a difference. I
just hope it’ll be better.
AVAILABLE LOCAL CITIES [LISTED ON MAP OF UNITED STATES]
Seattle
Portland
Sacramento
San Francisco
Los Angeles
San Diego
Salt Lake City
Denver
Albuquerque
Phoenix
Minneapolis/St. Paul
Chicago
Kansas City
St. Louis
San Antonio
Dallas/Ft. Worth
Austin
Houston
Detroit
Cleveland
Cincinnati
Indianapolis
Nashville
Birmingham
Boston
New York
Pittsburgh
Philadelphia
Washington, D.C.
Raleigh/Durham
Charlotte
Atlanta
Greenville/Spartanburg
Orlando
Tampa/St. Petersburg
Miami
www.dishnetwork.com [DISHNETWORK LOGO]
EXISTING MOST LIKELY
MARKETS MARKETS
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Albuquerque Colorado Springs
Atlanta El Paso
Austin Fresno
Dallas/Ft. Worth Honolulu
Denver Las Vegas
Houston Oklahoma City
Los Angeles Omaha
Phoenix Spokane
Portland Tucson
Sacramento Tulsa
Salt Lake City Waco
San Antonio Wichita
San Francisco
Seattle
[DISHNETWORK LOGO]
EXISTING MOST LIKELY
MARKETS MARKETS
-------- -----------
Boston Albany/Troy
Chicago Baltimore
Cincinnati Buffalo
Cleveland Burlington/Plattsburgh
Detroit Cedar Rapids
Indianapolis Champaign/Springfield
Kansas City Charleston
Minneapolis/St. Paul Columbus
Nashville Davenport/Rock Island
New York Dayton
Philadelphia Des Moines
Pittsburgh Evansville
St. Louis Flint/Bay City
Tampa/St. Petersburg Grand Rapids
Washington, D.C. Green Bay
Harrisburg/Lebanon
Harrisburg/Mt. Vernon
[DISHNETWORK LOGO]
EXISTING MOST LIKELY
MARKETS MARKETS
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Boston Hartford
Chicago Johnstown/Altoona
Cincinnati Lexington
Cleveland Louisville
Detroit Madison
Indianapolis Milwaukee
Kansas City Norfolk/Portsmouth
Minneapolis/St. Paul Paducah
Nashville Portland/Auburn
New York Providence/New Bedford
Philadelphia Richmond/Petersburg
Pittsburgh Roanoke/Lynchburg
St. Louis Rochester
Tampa/St. Petersburg South Bend/Elkhart
Washington, D.C. Syracuse
Springfield
Toledo
Wilkes Barre/Scranton
Youngstown
[DISHNETWORK LOGO]
EXISTING MOST LIKELY
MARKETS MARKETS
------- -----------
Birmingham Baton Rouge
Charlotte Chattanooga
Greenville/Spartanburg Columbia
Miami Fort Myers/Naples
Orlando Greensboro/Winston Salem
Raleigh/Durham Hunstville/Decatur
Tampa/St. Petersburg Jackson
Jacksonville/Brunswick
Knoxville
Little Rock/Pine Bluff
Louisville
Memphis
Mobile/Pensacola
[DISHNETWORK LOGO]
EXISTING MOST LIKELY
MARKETS MARKETS
------- -----------
Birmingham New Orleans
Charlotte Savannah
Greenville/Spartanburg Shreveport
Miami Tri-Cities, Bristol/Kingsport/J. City
Orlando West Palm Beach/Ft. Pierce
Raleigh/Durham
Tampa/St. Petersburg
[DISHNETWORK LOGO]
BENEFITS TO PRESENT AND
FUTURE CUSTOMERS:
o More markets served with Local Channels
o Competitive national pricing
o More HDTV channels
o Faster introduction of competitively priced, high speed internet services
for rural America
THIS MERGER WILL
NOT CAUSE YOU TO BUY
NEW EQUIPMENT.
[DISHNETWORK LOGO]