DIRECTV 2009 Annual Report Download - page 127

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DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
Liberty Media, Liberty Global and Discovery Communications
Beginning with Liberty’s acquisition of its ownership interest in DIRECTV Group from News
Corporation on 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.
Our transactions with Liberty Media and its affiliates consist primarily of the purchase of programming.
Although as a result of the Liberty Transaction, Liberty no longer has any equity interest in
DIRECTV, John Malone, Chairman of the Board of Directors of DIRECTV and of Liberty Media, has
an approximate 24% voting interest in DIRECTV, an approximate 31% voting interest in Discovery
Communications, Inc., or Discovery Communications, and an approximate 40% 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.
115