Charlie Ergen, founder and chairman/CEO at DISH Network, which on June 21st reported it had lost 281,000 subscribers during its Q2, said he was determined to do without Tribune Broadcasting’s 42 local stations which have been ‘dark’ for more than five weeks.
DISH is in a retransmission fee dispute with Tribune which Ergen described as “an honest disagreement on pricing…. We do hundreds of retrans deals, so we know where the marketplace is. And we think that [Tribune] is out of line on where they’re trying to go. And they’re complicated. if we were just talking about [Tribune-owned] WGN America that it would be a lot easier to get to more common ground there. But I think when you put those two things together, you end up with a wide gap and disparity in terms of where both companies see the values. So that takes a bit more art of compromise to figure that out. And that sometimes takes time.”
“If we ever get into a takedown situation, we have to be prepared that we will never put that channel back up again. So obviously, we were so far apart with Tribune that, that was the situation that we were in. It’s a little bit – and I would say for WGN America, it’s probably in that realm of anybody who wanted WGN America has probably left us. We don’t think that’s a big number, but they’ve probably left us. And so the value of putting WGN America back up is declining by the day, right?”
“We’re certainly prepared to live without Tribune and WGN America as a company. We know we’d lose some subscribers as a result of that. We’d save a lot of money in terms of fees, and we’re certainly prepared for that.”
Ergen added that DISH was also being tough with new subscribers who had poor credit scores. “We know there’s a high correlation for a profitable customer. There’s a high correlation geographically where they live. We know there’s a high correlation in terms of what equipment that they get from us. And so we take a lot of those factors, and I think we’ve just gone to a strategy that says it doesn’t make sense for us to invest in a customer if we don’t think we’re going to get a return. That was never an issue 10 years ago, but that’s an issue, as competition has come online, that wasn’t there against DBS.”