DIRECTV 2006 Annual Report Download - page 41

THE DIRECTV GROUP, INC.
granted on a timely basis or at all, in all jurisdictions in which we operate, or that applicable
restrictions in those jurisdictions will not be unduly burdensome. The failure to obtain the
authorizations necessary to operate satellites or provide satellite service internationally could have a
material adverse effect on our ability to generate revenue and our overall competitive position.
Our principal stockholder has significant influence over our management and over actions requiring
stockholder approval and its interests may differ from ours.
As of December 31, 2006, News Corporation held approximately 38.3% of the issued and
outstanding shares of our common stock. K. Rupert Murdoch, Chairman and Chief Executive of News
Corporation, is the Chairman of our Board of Directors, and Chase Carey, who is currently a director
of and was formerly employed by News Corporation, is our President and Chief Executive Officer and
a member of our Board of Directors. Additionally, two other current News Corporation executives are
members of our Board of Directors. As a result, News Corporation has significant influence relating to
our management and actions that require stockholder approval. The interests of News Corporation may
differ from the interests of other holders of our common stock. The extent of New Corporation’s stock
ownership in us also may have the effect of discouraging offers to acquire control of us and may
preclude holders of our common stock from receiving any premium above market price for their shares
that may be offered in connection with any attempt to acquire control of us.
On December 22, 2006, News Corporation agreed to exchange its stake in us with Liberty in
exchange for shares of News Corporation held by Liberty. The transaction, subject to various
conditions, is currently expected to be completed in the second half of 2007. Under the transaction
agreement, News Corporation has agreed that at closing, its three director designees will resign as
directors. It is expected that Liberty will seek election of its director designees. As a result, if the
transaction is completed and Liberty’s director designees are elected, Liberty is expected to have
significant influence relating to our management and actions that require stockholder approval. The
proposed interests of Liberty may differ from the interests of other holders of our common stock. The
extent of Liberty’s stock ownership in us also may have the effect of discouraging offers to acquire
control of us and may preclude holders of our common stock from receiving any premium above
market price for their shares that may be offered in connection with any attempt to acquire control of
us.
News Corporation has agreed to certain ‘‘standstill’’ provisions relating to us during the pendency
of the transaction with Liberty, which may have the effect of limiting significant transactions with third
parties which would require stockholder approval. Further, in the unlikely event that the transaction
between News Corporation and Liberty is not completed, our stock price may be adversely affected due
to uncertainty regarding future actions of News Corporation with respect to its ownership interest in us.
We may face other risks described from time to time in periodic reports filed by us with the SEC.
We urge you to consider the above risk factors carefully in evaluating forward-looking statements
contained in this Annual Report. The forward-looking statements included in this Annual Report are
made only as of the date of this Annual Report and we undertake no obligation to publicly update
these forward-looking statements to reflect subsequent events or circumstances.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
30