After acquiring its chief competitor in the direct satellite-to-home television broadcasting business, Communication Satellite Corp. has begun searching for a new chief executive officer for its troubled direct broadcast satellite venture.
"We have embarked upon an effort, along with our partners, to seek an operational head of the new business," said a Comsat spokesman, adding that the effort has been under way for two weeks.
Comsat recently acquired for an undisclosed sum United Satellite Communications Inc., a New York-based direct broadcast satellite service, and is merging it into its Satellite Television Corp. subsidiary.
The acquisition, which has yet to be finalized, prompted a major reorganization of Satellite Television. Its president, Richard Bodman, resigned and several other top officers have either left or are expected to leave shortly. In addition, Nathaniel Kwit, head of USCI, is not expected to remain with the company. A Comsat spokesman, however, insisted Kwit's name is under consideration to run the new company.
Reportedly, Comsat has already had several rejections for the post. One executive said the company was prepared to offer salary and bonus terms that would make the offer "worth tens of millions of dollars," but said the company's business plan and Comsat's management made him reject the offer.
The Comsat spokesman said that many aspects of STC's future would be "in limbo" until a new chief executive officer was hired.
Comsat's difficulties in finding a boss for its satellite television venture reflect the turmoil in the fledgling business. Several major companies, including Western Union Co., RCA Corp. and CBS Inc., withdrew their direct broadcast satellite applications before the Federal Communications Commission. In addition, USCI, which had been the only direct broadcast satellite telvision service in operation, was reportedly losing millions of dollars before its acquisition by Comsat.
Comsat itself has cut back on the investment in its direct broadcast satellite plans and is continuing its search for equity partners in its STC venture.