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Charlie Ergen, founder and chairman of Dish Network (and also of sister company Echostar) is a self-confessed poker player, but this past weekend’s deal where AT&T is to buy Dish’s arch-rival DirecTV must leave him somewhat anxious about the cards he is still holding
Ergen, for some time, has wanted to merge or sell his Dish assets into DirecTV and create a DTH behemoth to more successfully compete with the USA’s cable operators.
That isn’t to be, but the market is full of rumours as to what Charlie might do next. Not least is that he is a couple of hands ahead in his thinking. First up is reported talks with AT&T rival Verizon,and denied by Verizon’s CEO. Market analyst Craig Moffett suggests: “Dish Network has just been left standing … That Verizon might be a buyer is more wishful thinking than it is analysis.”
Separately, bankers at Wells Fargo think Verizon might bid for Dish’s spectrum, but not the whole company.
Another much rumoured move could see Ergen merge or sell Dish Network to T-Mobile.
And there might be obstacles in the way of the AT&T deal for DirecTV. Already the small print in the deal suggests that if certain key broadcasting assets are not renewed then the deal might be scrubbed. Could this scenario allow Ergen and his counterparts at DirecTV to start seriously talking? And the usual anti-trust regulators may yet stymie the deal.
Analysts at IHS say: “DirecTV is a ripe fruit waiting to be plucked. It continues to grow video subscribers in the US, although at a pace that continues to slow. It also commands a monthly video ARPU of nearly $100, the highest video ARPU of any pay TV operator. It has also been successful with its focus to attract high end consumers.
Of course, the much-quoted mantra of “we talk to everyone all the time” might truly apply to Ergen, but do not be surprised if Ergen – of all people – lays down a winning hand at the end of the day.