Dish Consolidates Satellite TV Holdings

Dish Network May 20 announced it is combining certain EchoStar operations and other assets that comprise the company’s satellite business, including nine direct broadcast satellites and the certain key employees responsible for operations.

The 22.9 million stock transaction, which includes select real estate properties, will be distributed to EchoStar shareholders.

Dish in 2017 acquired select EchoStar assets to better deliver linear pay-TV and online platform Sling TV to subscribers. Key broadcast satellite operations and services remained with EchoStar, which is also owned by Dish chairman Charlie Ergen.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“This transaction brings those operations, including the BSS satellites, associated assets and key team members, in house and we expect those additions will create operational efficiencies and improve both free cash flow and pre-tax earnings,” Dish CEO Erik Carlson said in a statement.

The transaction is structured to be a tax-free exchange and is expected to close in the second half of 2019, subject to satisfaction or waiver of closing conditions.

Dish Expects More Sub Losses When HBO’s Final ‘Game of Thrones’ Season Begins in April

Dish Network lost more than 1 million video subscribers in 2018, including 334,000 in the fourth quarter, ended Dec. 31, 2018. The satellite pay-TV operator attributed the losses to ongoing carriage disputes with Univision and HBO.

With HBO set to begin the airing the eighth and final season of “Game of Thrones,” on April 14, Dish chairman Charlie Ergen believes sub losses could increase unless an agreement is reached. He said Dish subs have learned to live without HBO due in part to the channel’s lack of significant new programming in Q4 (with the exception of “True Detective”).

“I think that realistically you would expect that when “Game of Thrones” comes on you may see a pickup in defections,” Ergen said on Feb. 13 fiscal call – adding that losing long-time distribution partners underscored the changing dynamics of pay-TV in an era of over-the-top video.

Indeed, some analysts attributed 200,000 of Dish’s Q4 sub losses to the HBO dispute – a figure management didn’t entirely dispute – and the reality consumers can access the premium channel as standalone product HBO Now and via Amazon Channels.

CEO Erik Carlson said that with HBO owner AT&T an active satellite competitor (via DirecTV), negotiations remain at an impasse.

Subscribe HERE for FREE Daily Newsletter!

“HBO is demanding a [carriage] contract that would have forced Dish customers to subsidize both HBO and Cinemax even if customers chose not to subscribe to those services,” Carlson said.

Dish charged subscribers $15 and $10 monthly for HBO and Cinemax, respectively, under the previous contract.

The executive said AT&T/HBO’s negotiating strategy underscores Dish’s ongoing opposition to the AT&T/Time Warner merger that created AT&T’s  WarnerMedia unit.

The merger, which has been appealed by the Justice Department, is currently under review by a federal appeals court judge.

“Our view hasn’t changed: AT&T’s uncompromising stance remains the fundamental negative of their merger with Time Warner,” Carlson said.