DIRECTV 2008 Annual Report Download - page 110

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
Note 16: Related-Party Transactions
In the ordinary course of our operations, we enter into transactions with related parties as
discussed below.
Liberty Media, Liberty Global and Discovery Communications
As a result of the completion of the Liberty Transaction, beginning February 27, 2008, transactions
with Liberty Media Corporation, or Liberty Media, and its affiliates, including its equity method
investees, may be considered to be related party transactions as Liberty Media currently owns
approximately 54% of our outstanding common stock. Our transactions with Liberty Media and its
affiliates consist primarily of the purchase of programming.
In addition, John Malone, Chairman of the Board of Directors of The DIRECTV Group, Inc. and
of Liberty Media, has an approximate 23% voting interest in Discovery Communications, Inc., or
Discovery Communications, and an approximate 32% voting interest in Liberty Global Inc., or Liberty
Global, and serves as Chairman of Liberty Global, and certain of Liberty Media’s management and
directors also serve as directors of Discovery Communications or Liberty Global. As a result of this
common ownership and management, transactions with Discovery Communications and Liberty Global,
and their subsidiaries or equity method investees may be considered to be related party transactions.
Our transactions with Discovery Communications and Liberty Global consist primarily of purchases of
programming created, owned or distributed by Discovery Communications and its subsidiaries and
investees.
News Corporation and affiliates
News Corporation and its affiliates were considered related parties until February 27, 2008, when
News Corporation transferred its 41% interest in our common stock to Liberty Media. Accordingly, the
following contractual arrangements with News Corporation and its affiliates are considered related
party transactions and reported through February 27, 2008: purchase of programming, products and
advertising; license of certain intellectual property, including patents; purchase of system access
products, set-top receiver software and support services; sale of advertising space; purchase of employee
services; and use of facilities.
As discussed below in Note 19, during the first quarter of 2008, we received a $160 million cash
capital contribution, which we recorded as ‘‘Additional paid-in-capital’’ in the Consolidated Balance
Sheets.
The majority of payments under contractual arrangements with Liberty Media, Discovery
Communications, Liberty Global and News Corporation entities relate to multi-year programming
contracts. Payments under these contracts are typically subject to annual rate increases and are based
on the number of subscribers receiving the related programming.
Other
Other related parties include Globo, which provides programming and advertising to Sky Brazil,
and companies in which we hold equity method investments, including Sky Mexico.
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