Hubbard's Secret Satellite Weapon

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Now we know why the clan of venerable broadcaster Stanley S. Hubbard is suddenly so busy in the cable business: Time is running out.

After years of stalled cable efforts, Hubbard Broadcasting finally launched movie infotainment network ReelzChannel in June. Then, last week, the Hubbards stepped up as one of the investors pumping $56.5 million into long-ailing arts channel Ovation.

Why the rush? The Hubbards have a little-known deal granting them slots for three channels on DirecTV and the potential to reach its 16 million subscribers—and the deal expires soon.

Securities filings show that, when DirecTV bought USSB, the satellite TV service Hubbard controlled, in 1999, the deal included a special agreement to carry the Hubbards’ All News Channel (which ultimately folded in 2002), as well as two additional channels to be developed later.

With the deal expiring this year, the company has had to move quickly. So when Ovation’s investment banker, Lazard Freres, approached the company about the channel, Hubbard’s son, Stanley E. Hubbard II, pounced, agreeing to buy in and use the DirecTV rights as leverage to secure carriage.

The younger Hubbard would not comment on Ovation and the DirecTV deal. Sources familiar with the negotiations say Ovation’s new investor group—which includes the Weinstein Company and Tennis Channel Chairman Ken Solomon—are negotiating with DirecTV but have not finalized a deal.

With small cable channels struggling for carriage, the Hubbards’ deal works out pretty well for tiny Ovation and its 5.3 million subscribers.

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