Pegasus Satellite TV

Pegasus Satellite Television was formed in 1996 as a wholly owned subsidiary of Pegasus Communications Corp. to handle the distribution of its Direct TV franchise, which was purchased from South Coast Satellite in 2000 for $22.5 million in cash and stock. The franchise contract covers 41 states and serves 1.1 million subscribers, mostly in rural areas, and gives Pegasus exclusive rights to sell the satellite service in those areas.

In June of 2004, Direct TV moved to end its contract with Pegasus in order to pursue negotiations with the National Rural Telecommunications Cooperative (NRTC). Because that move threatened to cost Pegasus millions in revenue (the satellite venture is Pegasus Communications Corp.'s biggest revenue producer) the subsidiary filled for Chapter 11 bankruptcy protection in order to keep the agreement with Direct TV in effect. It also sued Direct TV and NRTC, alleging that the two companies conspired to steal customers from it. The lawsuit sought punitive as well as actual damages and asked the court to halt the efforts of Direct TV and NRTC to “destroy” Pegasus. However, the bankruptcy court in Bangor, Maine ruled that Direct TV could begin selling in the Pegasus franchise area but could not use Pegasus subscriber information to do so.

Pegasus Satellite Television and Pegasus Communications Corp. have outstanding loans in excess of $490 million against assets of $1.6 billion and revenues totaling $831 million for fiscal year 2003. Things are beginning to look up for the beleaguered company, however. The court granted a request to use roughly $40 million of the revenues to cover their June payroll obligations. That means that all their call center jobs are safe for now. Pegasus maintains call centers in Louisville , Arkansas , and in Kansas , Massachusetts , and Texas. Pegasus Satellite Television will continue all operations as normal and are working hard to resolve the contractual disputes with Direct TV that led to the Chapter 11 filing.

Pegasus Communications Corp. is based in Bala Cynwyd , Pennsylvania . It owns multiple subsidiary companies including Pegasus Satellite Television and several television broadcasting entities.

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