DIRECTV 2008 Annual Report Download - page 46

THE DIRECTV GROUP, INC.
regulations are ongoing. The outcomes of these legislative or regulatory proceedings or their effect on
our business cannot be predicted.
We face risks arising from the outcome of various legal proceedings.
We are involved in various legal proceedings, including those arising in the ordinary course of
business and those described under the caption ‘‘Legal Proceedings’’ in Item 3. While we do not
believe that any of these proceedings alone or in the aggregate will have a material effect on our
consolidated financial position, an adverse outcome in one or more of these matters could be material
to our consolidated results of operations and cash flows for any one period. Further, no assurance can
be given that any adverse outcome would not be material to our consolidated financial position.
We control a substantial portion of interaction with our customers and we may not be as efficient or
effective as our outsourced providers resulting in higher costs.
We have a number of insourced call centers and recently insourced a substantial portion of our
installation service providers to handle customer service calls, installations and repairs. We may not be
as efficient or effective as our outsourced providers resulting in higher costs. Also, there is a risk that
our customer satisfaction could be impacted, which may lead to higher subscriber churn and an inability
to attract new subscribers. In addition, our outsourced providers could encounter financial difficulties,
which may disrupt our ability to make installation service calls or to provide a level of customer service
we expect, and which also may lead to higher subscriber churn and an inability to attract new
subscribers.
We face risks arising from possible union legislation in the United States.
There is a possibility that the proposed Employee Free Choice Act, or EFCA, may be enacted.
The EFCA, also referred to as the ‘‘card check’’ bill, if passed in its current form could significantly
change the nature of labor relations in the United States, specifically, how union elections and contract
negotiations are conducted. With respect to our owned and operated HSP business, it would be easier
for unions to win elections and we could face arbitrator-imposed labor scheduling, costs and standards.
Therefore, the EFCA could impose more labor relations requirements and union activity on our
business, thereby potentially increasing our costs, and could have a material adverse effect on our
overall competitive position. Currently, neither we nor most of our outsourced HSP vendors have any
unions.
We may not be able to obtain or retain certain foreign regulatory approvals.
There can be no assurance that any current regulatory approvals held by us are, or will remain,
sufficient in the view of foreign regulatory authorities, or that any additional necessary approvals will be
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.
We have significant debt.
We 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.
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