by Mike Masnick
Tue, Sep 25th 2007 2:20am
Late Monday, the news came out that EchoStar was buying Sling Media for $380 million in cash and stock. It's not surprising that Sling would go for such a deal, but it's a pretty wide open question as to whether or not this move will hurt Sling's prospects. EchoStar had already been an early investors in Sling, but in buying the entire company outright, it might make it that much harder for Sling to work with other providers, who might not want to be seen supporting the "competition." Also, since Sling isn't EchoStar's main business, if the company comes on hard times, it may not devote enough resources to keeping Sling moving forward. Finally, there were already plenty of companies who were upset about how the Slingbox enables placeshifting. There have been occasional threats of lawsuits from organizations like HBO and Major League Baseball. While Sling has pretty strong defenses for why the Slingbox is legal, now that there's a big company with a lot of money behind it, it becomes a much more attractive lawsuit target. In fact, it wouldn't be surprising to see lawsuits start to fly against Sling and EchoStar rather rapidly. All in all, it makes you wonder if Sling Media is actually worth a lot less as a part of EchoStar than independent. That doesn't mean it's a bad deal for the folks at Sling, who have a great opportunity to cash out -- but it could potentially slow down the innovation coming out of the company.
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