Pegasus Sues to Keep DirecTV Contract

Pegasus Communications Corp. sued DirecTV Group Inc., the biggest U.S. satellite television provider, and a rural telecommunications organization, claiming they sought to destroy Pegasus by stealing its business.

DirecTV and the National Rural Telecommunications Cooperative this month ended Pegasus’ exclusive contract to resell service to 8.4 million U.S. households in 41 states, prompting Pegasus’ satellite TV unit to file for bankruptcy protection.

Pegasus made 96% of its revenue last year from reselling DirecTV’s satellite service. The Bala Cynwyd, Pa.-based firm is fighting to keep the right to resell DirecTV under a 1994 agreement between DirecTV and the rural group, which gave Pegasus exclusive marketing rights in some regions.