Dish CEO defiant after losing Fox channels
Analyst questions company's stance in tough market
By Georg Szalai
Share24
Oct 5, 2010, 04:08 PM ET
NEW YORK -- Dish Network CEO Charlie Ergen in an
online video message Tuesday defended the satellite TV company's decision not to immediately sign a new carriage deal with News Corp./Fox for
19 regional sports channels, FX and National Geographic.
The previous arrangement between the two companies
expired last week, and Dish subscribers lost the networks as of Friday.
"Nowadays, big programmers like Fox want you to pay extra to watch sports and they want you to pay even more to watch their particular channel," Ergen said in his video message to subscribers. "It would be easy for us to cave in to Fox's demands," but it would lead to fewer programming choices and higher prices, he argued.
But BTIG analyst Richard Greenfield questioned Ergen's defiance in a note to investors entitled "Lesson #1: Only Start A War You Have A Chance At Winning," arguing that the missing programming, particularly on the sports side, may just add to Dish's challenges.
"Dish is already struggling to add subscribers due to the weak economy and growing competition in a mature video business," Greenfield said in a blog post on Tuesday.
"While we acknowledge this battle will only really impact subscriber losses at Dish if it drags on for a minimum of 2-3 weeks, Charlie Ergen does not look like someone about to give up ... If this drags into November with Dish losing broadcast network programming, it could be a
meaningful near-term positive for DirecTV and cable competitors -- as customers will eventually begin to switch."
After all,
Dish users may lose the ability to watch NFL Sunday afternoon games and games 5-7 of the World Series, if they take place, in cities where Fox has a station.
With Fox and Dish also facing the end of their current arrangement for Fox's owned-and-operated TV stations at the end of the month, the analyst argued that waiting to renew both arrangements in several weeks makes no business sense.
"
What's the benefit of going dark for four weeks and losing subs, only to ultimately pay Fox what they are demanding," he asked. "We can only presume [Ergen] is prepared to be dark for the long-haul."
A Dish spokeswoman said in a response that programmers "are increasingly bullying pay TV companies into extraordinary rate increases in an effort to pay for expensive sports acquisition rights."
She said the Fox sports channels represent less than 2% of the content that Dish makes available in its most popular programming package. And of the hours that Dish customers spend on watching TV, less than 1% are spent on regional sports networks, she added.
