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LodgeNet Expands DirecTV Pact

Deal Includes Financing, Upgrade Packages for Hospitality Industry 3/12/2013 11:58 AM Eastern

With its acquisition by Colony Capital expected by the end of the month, LodgeNet said Tuesday it has expanded its agreement with satellite TV giant DirecTV, offering upgraded products and financing for the company’s hospitality and healthcare customers.

In December, private equity firm Colony Capital agreed to invest about $60 million in a recapitalization of  LodgeNet, implemented through a pre-packaged Chapter 11 bankruptcy filing.  In return for the investment, Colony and its affiliates will receive 100% of LodgeNet’s equity. That deal is expected to close by the end of March.

"As partners, LodgeNet and DirecTV will combine their complementary resources to offer customers options not currently available in the hospitality and healthcare markets," said Colony Capital principal Richard Nanula in a statement. "These enhancements will help reestablish hospitality-based TV as the preeminent viewing experience, a distinction it held when the company first introduced pay-per-view and video-on-demand to the marketplace over 20 years ago."

The DirecTV agreement, which is contingent on the closing of the Colony investment, will provide LodgeNet’s hospitality and healthcare customers with upgraded products and services, as well as a financing program to facilitate upgrades to HDTV service at little or no out-of-pocket capital expense to its customers. LodgeNet provides service to about 1.4 million hotel and hospital rooms in the U.S. and Canada.

LodgeNet customers will gain access to new a la carte programming options, including DirecTV's NFL Sunday Ticket and other exclusive content. LodgeNet will also introduce a new user interface -- similar to the one DirecTV offers its residential customers -- and an expanded level of support provided by the satellite giant.  

"We look forward to working with LodgeNet and Colony to create an in-room video experience that truly differentiates our hospitality and healthcare partners from their competitors, while significantly growing DirecTV's commercial business," said DirecTV chief revenue and marketing officer Paul Guyardo in a statement. "This partnership provides yet another opportunity to build a phenomenal experience reflective of the DirecTV brand."

September