When Orby TV declared bankruptcy last month, it did so with a little more than $500,000 in the bank.
That figure was less than one percent of what the company owed to its creditors — among them, several content programmers who agreed to supply live channels to Orby TV and a large pension fund-backed investment group whose identity was unknown to the public until now, according to new court documents filed with a federal bankruptcy court in California and reviewed by The Desk this week.
The documents illustrate a dire situation at the startup satellite television company that once had ambitious plans to challenge the traditional cable and satellite industry and its expensive pay television packages with a cheaper, prepaid offering.
Orby TV sold satellite television set-top boxes, dishes and installation for around $200. Pay television packages started at $40 a month for a few dozen general entertainment, lifestyle, knowledge and news channels supplied by ViacomCBS, A+E Networks, AMC Networks, Discovery and a few others.
Customers had to purchase the satellite hardware and installation up front, but Orby TV often ran sales, and the company promised customers they’d see savings over the long term compared to more-expensive cable and satellite offerings. Installers also mounted an over-the-air antenna to Orby TV’s required satellite dish, which allowed customers to pull in free, broadcast signals whether they continued paying for an Orby TV package or not.
Orby TV’s hardware was sold directly to customers through the company’s website. The company also had an agreement with Best Buy and Target stores to sell its set-top boxes in brick-and-mortar stores. There were plans to eventually offer the devices through more retailers, but those never came to fruition.
Instead, Orby TV mostly struggled during its short existence. According to documents reviewed by The Desk, Orby TV started off strong: Despite launching toward the end of 2019, Orby TV ended that year with $4.8 million in gross business revenue in 2019. But things started to slow down drastically in 2020, with Orby TV bringing in just $13.7 million in gross business revenue, an average of about $3.5 million in revenue per quarter.
Last month, Orby TV declared it was going out of business last month. By that time, the company’s gross business revenue had dropped to $2.58 million in the first three months of 2021.
Shortly after the company closed, Orby TV’s chief executive Michael Thornton said the pandemic was mostly to blame for the company’s crisis, in that it hurt Orby TV’s ability to raise much-needed capital because executives weren’t able to travel or make in-person pitches to new investors.
Now the company is trying to figure out how it will pay back a number of companies.
Counted among Orby TV’s creditors is the General Electric Pension Trust, an investor Thornton declined to identify many times during the company’s existence (Thornton said the investor, whom he’d only describe as “a large pension firm,” did not want to be revealed). According to financial disclosures filed in federal court this week, Orby TV owes the pension fund more than $11.6 million.
Severance pay totaling hundreds of thousands of dollars is also owed to several key company executives, including Thornton, court documents reviewed by The Desk revealed.
The bulk of Orby TV’s debt rests with the programmers who supplied linear television content to the service. The company owes $16.4 million to ViacomCBS, the entertainment conglomerate behind MTV Nickelodeon and Comedy Central, and another $10.4 million to AMC Networks, according to the disclosures.
All told, Orby TV says it owes more than $51.8 million to its creditors. In court filings, the company warned that liability could increase if customers file claims against Orby TV during the bankruptcy process. Notices have already been mailed to most customers notifying them of their right to file a claim.