EchoStar Picks Up Sling Media For $380 Million, Wants Spin-Off

Satellite TV provider EchoStar will pay $380 million in cash and options for Sling Media, which makes the “place shifting” SlingBox — a device that lets users watch their home television sets from afar, via an Internet connection.UPDATE: EchoStar announces this morning that it wants to immediately turn around and spin Sling off into a separate public company.

Under proposed plan, EchoStar’s U.S. consumer pay-TV business would continue to operate as the DISH Network(r). Most of the company’s other technology and infrastructure assets would be spun-off in a transaction intended to be tax-free to EchoStar and its shareholders. Upon completion of the spin-off transaction, the shareholders of EchoStar would have separate pro rata ownership interests in each company.

“We believe separation of our consumer-based and wholesale businesses could unlock additional value. Each company would be able to separately pursue the strategies that best suit its respective long-term interests. The spin-off transaction would also allow employee incentives to be tied to their respective company’s performance, and improve opportunities to effectively develop and finance expansion plans,” said Charlie Ergen, Chairman and Chief Executive Officer of EchoStar.

As PaidContent notes, the deal will set in place an interesting set of discussions:

1) Both EchoStar and rival DirectTV, now controlled by Liberty Media’s (LINTA) John Malone, were early investors in Sling.
2) Both the SlingBox and Sling’s related “Clip and Sling” service, which is supposed to let users make their own clips from shows they watch and post them to a central service, have inspired all manner of teeth-grinding and/or interest from TV networks and content producers, who can’t decide if the company is a threat or an ally. A deal that brings it under control of one of the two biggest satellite TV services may not clarify things. Release