DIRECTV 2007 Annual Report Download - page 40

THE DIRECTV GROUP, INC.
of and 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 first quarter of 2008. 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
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 have significant debt.
We have sustained significant losses in the past and have significant amounts of debt. If we do not
have sufficient income or other sources of cash, it could affect our ability to service debt and pay other
obligations.
Results are impacted by the effect of, and changes in, United States and worldwide economic
conditions.
Our business may be affected by factors in the United States and other countries in which we
operate that are beyond our control, such as downturns in economic activity in a specific country or
region, or in the MVPD industry. Factors such as interest rates and the health of the housing market
may impact our business. A significant market downturn could have a material adverse effect on our
earnings and financial performance.
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.
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