Calling itself “a casualty of what has become a fiercely competitive battle in the satellite broadcast TV industry,” Aberdeen-based Prime TV abruptly ordered a massive layoff Friday.
Prime TV is a sister company of the Gatelinx Corp. and is located within the Gatelinx offices in the former Winn Dixie building on U.S. 1.
Richard L. Yelver-ton III, attorney for the normally publicity-shy Prime TV, declined to say how many of the company’s 400-plus employees would lose their jobs. But an employee who asked not to be identified told The Pilot that about 200 people had been laid off.
Prime TV marketed satellite service, equipment and installations for California-based DirecTV. Prime TV issued a scathing press release blaming DirecTV for the layoffs.
It said that DirecTV had terminated its sales contract with Prime TV, making it “impossible for the company to conduct business as usual.”
Repeated efforts by The Pilot to obtain a response from DirecTV representatives in El Segundo, Calif., on Saturday were un-successful.
Together with Gatelinx, Prime TV is one of the leading employers in the county. In the press release, David Hagen, identified as the manager of Prime TV, pledges to help workers find jobs in some of the other companies in which he holds interest.
Representatives from Prime TV and Gatelinx are unusually secretive about their ownership, but Hagen is believed to own at least a part of both companies and several other businesses in the area.
According to the press release, DirecTV informed Prime TV Thursday that it would be withholding commissions for more than 65 days.
“Withholding millions of dollars in commission payments as well as an estimated $11 million in past due amounts owed to Prime TV has made it impossible for the company to conduct business as usual,” the release said.
Prime TV asked for a temporary restraining order be placed on DirecTV to require that it continue to make payments, but Moore County Superior Court Judge James Webb denied that order late Friday morning, the company said. There is no appeal process.
Negotiations with DirecTV throughout the day Friday failed, and Prime TV had to close its customer service, installations and warehouse.
Prime TV began in 1997 as a provider of DirecTV. It expanded rapidly by offering DirecTV at an affordable price and offering rebates. It was formerly housed in the Atrium shopping center on Murray Hill Road. In 2003, it moved to the much larger Gatelinx complex.
The corporation’s growth had been unabated until now. Midway through last year Gatelinx was the sixth-largest employer in the county.
Prime TV said that DirecTV’s withholding of payments is “typical of a strategy employed by DirecTV to squeeze out its dealers.” Dealers in Los Angeles have taken DirecTV to court seeking more than $300 million in damages, the press release claimed.
“Besides hurting employees,” Hagen said, “this draconian action by DirecTV prevents us from paying thousands of installers who installed customer equipment, countless vendors who have provided goods and from providing service to tens of thousands of customers.
“This action also hurts Moore County and the state of North Carolina, whose residents benefited from the over $65 million in revenues Prime TV brought to the state in 2003 alone. … I am in shock.”
DirecTV cancelled the contract because it believes that Prime TV has also been selling products for DirecTV’s largest competitor, Dish Network, according to the press release. Prime TV denies that claim. A company that operates out of the Gatelinx building does sell Dish Network, but the Prime TV press release called it an unrelated dealership.
“DirecTV offered to continue paying us if we would force an unrelated Dish Network dealership out of business,” Hagen said. “I wouldn’t. I am not going to participate in their anticompetitive machinations.”
Prime TV further charges that DirecTV copies the models of the most successful dealers, shuts them down and replaces them with a DirecTV dealership. It claims that DirecTV has shut down more than 5,000 dealers in the past several years and has opened several call centers of its own.
“They made us show them how to set up and manage a successful call center, where and when to buy media, and now we are expendable,” Hagen said.
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