1.0.0.3 false Liberty Entertainment Inc. Merger Transaction false 1 $ false false Unit_1 Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 Unit_2 Standard http://www.xbrl.org/2003/instance shares xbrli 0 Unit_5 Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 2 Liberty Entertainment Inc. Merger Transaction [Abstract] 0 dtv_LibertyEntertainmentIncMergerTransactionAbstract dtv false na duration string Liberty Entertainment Inc. Merger Transaction false false false false false true false false false 1 false false 0 0 false false Liberty Entertainment Inc. Merger Transaction false 3 Liberty Entertainment Inc. Merger Transaction 1 dtv_PlannedBusinessCombination dtv false na duration string Description of a business combination planned and initiated during the period, including background, timing, and recognized... false false false false false false false false false 1 false false 0 0 <div> <div><div><div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div class="Section1" style="page: Section1;"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; font-family: 'Times New Roman','serif';"><b>Note 2: Liberty Entertainment Inc. Merger Transaction</b></p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">On May 3, 2009, The DIRECTV Group, Liberty Media, Liberty Entertainment, Inc., or LEI, and certain subsidiaries of The DIRECTV Group entered into an agreement and plan of merger, which we refer to as the “merger agreement”, which, if consummated, will result in the creation of a new public holding company named “DIRECTV” which we refer to as “Holdings”, that will own The DIRECTV Group and LEI. Holdings will be owned by the holders of The DIRECTV Group common stock and the holders of LEI common stock immediately prior to the mergers contemplated by the merger agreement.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">As a necessary step to the mergers contemplated by the merger agreement, Liberty Media is planning to execute a split-off transaction that would result in the redemption of 90% of the outstanding shares of both series of its Liberty Entertainment common stock in exchange for all of the outstanding shares of two series of common stock of LEI. LEI will hold Liberty Media’s entire interest in The DIRECTV Group (currently approximately 57%), 100% of Liberty Sports Holdings LLC, 65% of Game Show Network, LLC and approximately $80 million in cash and cash equivalents, together with approximately $2 billion of indebtedness and a related equity collar. The split-off transaction is conditioned on the approval of the holders of Liberty’s Liberty Entertainment common stock.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">The merger agreement provides for two mergers that would result in The DIRECTV Group and LEI becoming wholly owned subsidiaries of Holdings. In the DIRECTV merger, The DIRECTV Group common stockholders (other than direct or indirect subsidiaries of LEI) will receive one share of Holdings Class A common stock for each share of common stock of The DIRECTV Group that they own. In the LEI merger, holders of outstanding shares of LEI Series A common stock and LEI Series B common stock (other than LEI or Holdings) will receive a number of shares of Holdings Class A common stock equal to the LEI exchange ratio for each share of LEI common stock that they own. The LEI exchange ratio is a fixed exchange ratio equal to 1.11111 shares of Holdings common stock for each share of LEI common stock, subject to certain adjustments as provided in the merger agreement.</p> </div> <font class="_mt" style="font-size: 10pt; font-family: 'Times New Roman','serif';"><br clear="all" /></font> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">After completion of the split-off, John C. Malone (the Chairman of The DIRECTV Group and Liberty Media), his wife and certain trusts for the benefit of their children, collectively the “Malones”, will own approximately 92% of the LEI Series B common stock. Immediately prior to the mergers, the Malones, pursuant to a voting and right of first refusal agreement, will exchange each of their shares of LEI Series B common stock for a number of shares of Holdings Class B common stock equal to the number of shares of LEI Series B common stock multiplied by the LEI exchange ratio. Holdings Class B common stock will have fifteen votes per share and certain limited consent rights and will not be publicly traded, and Holdings Class A common stock will have one vote per share and is expected to be listed on the NASDAQ National Market System. Upon completion of the mergers, the Malones will be the only holders of Holdings Class B common stock.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">Holders of certain equity awards of LEI, including stock options and stock appreciation rights, or SARs, will receive equity awards of Class A common stock of Holdings based on the LEI exchange ratio.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">The mergers will be accounted for using the acquisition method of accounting pursuant to the accounting standards for business combinations. The DIRECTV Group will be treated as the acquiring corporation for accounting and financial reporting purposes, accordingly it is anticipated that the historical financial statements of The DIRECTV Group will become the historical financial statements of Holdings. Under the business combination accounting standards, the acquisition date fair value of consideration paid by The DIRECTV Group for LEI (excluding its investment in The DIRECTV Group) will be allocated to LEI’s other tangible and intangible assets acquired and liabilities assumed based on their estimated acquisition date fair values, with any excess being treated as goodwill. The assets, liabilities and results of operations of LEI will be consolidated into the assets, liabilities and results of operations of Holdings as of the acquisition date, the closing date of the mergers.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">Costs incurred to complete the transaction, including legal, accounting, financial printing and investment banking fees, will be expensed as incurred. The exchange ratio of LEI common stock to The DIRECTV Group common stock was determined in a manner such that LEI stockholders as a group will receive a premium in the form of a larger economic interest in Holdings than would have been otherwise determined based on the relative fair values of The DIRECTV Group and LEI. This premium, calculated as the fair value of the economic interest to be distributed to LEI stockholders in excess of the fair value of the assets and liabilities of LEI, will be expensed as a disproportionate distribution upon completion of the mergers. In addition, as part of the mergers, Holdings will grant common stock options and SARs to replace the stock based awards of LEI. Pursuant to business combination accounting standards, any incremental fair value of the replacement awards over the fair value of the replaced LEI awards must also be expensed. Had the merger been completed on September 30, 2009, we estimate that Holdings would have recorded an expense of approximately $289 million on that date for the costs of the transaction, the premium to LEI stockholders, and the incremental fair value of the stock based awards. However, we anticipate the actual amounts to be recorded will change as they will be determined based on acquisition date fair values.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">Since many of the LEI replacement stock based awards are held by individuals who will remain employees of Liberty Media and not become employees of Holdings, they will be reported as a liability at fair value by Holdings in accordance with accounting standards for non-employee awards. Also, Holdings will continue to account for derivative financial instruments of the equity collar acquired as a result of the mergers as a net asset or liability at fair value. Adjustments to the fair values of the stock based awards and the equity collar each reporting period will be recorded in non-operating earnings in the consolidated statements of operations of Holdings.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">The financial and other information regarding The DIRECTV Group contained in this Quarterly Report on Form 10-Q does not give effect to or make any adjustment for these transactions.</p> <font class="_mt" style="font-size: 10pt; font-family: 'Times New Roman','serif';">For additional information regarding the proposed merger transactions, refer to Amendment No. 5 to Holdings’ Registration Statement on Form S-4 filed with the SEC on October 20, 2009, which has been declared effective. Assuming the receipt of the requisite stockholder approvals and satisfaction of all other conditions, the proposed transactions are expected to close after the meetings of the respective stockholders of Liberty Media and The DIRECTV Group to be held on November 19, 2009.</font></div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div></div></div> </div> Note 2: Liberty Entertainment Inc. Merger Transaction On May 3, 2009, The DIRECTV Group, Liberty Media, Liberty Entertainment, Inc., or false false Description of a business combination planned and initiated during the period, including background, timing, and recognized assets and liabilities. This element may be used as a single block of text to encapsulate the entire disclosure (including data and tables) regarding business combinations. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true