The satellite company says that it was hit by several factors including the effects of a price increase, rising programming costs, and the continued downturn at Blockbuster. Dish ended up with Q1 net income of $210.7M, -41.5% vs the period last year, on revenues of $3.56B, -7.4%. Analysts thought revenues would come closer to $3.61B. And earnings at 47 cents a share were 6 cents short of the consensus forecast. The company ended the quarter with 14.1M subscribers, +36,000 vs an increase in last year’s Q1 of 104,000. Dish says it was hurt by a rate hike which it did not have last year. The deconsolidation of Blockbuster UK and closing of U.S. storefronts resulted in a 46% drop in the operation’s revenues to $180M, while operating income fell to $1M from $14M. It had about 650 domestic stores at the end of March, down 150 in the quarter, and says it will close another 150 this quarter. In the satellite business, the February price increase contributed to a 3% rise in the average revenue per subscriber to $78.54 a month. READ MORE »
In a move that could potentially thwart SoftBank’s proposed $20B acquisition of 70% of Sprint Nextel, Dish Network has made an unsolicited $25.5B offer for the U.S. number three mobile services provider. Dish chairman Charlie Ergen said today that his company’s cash and stock bid is “a superior alternative to the pending SoftBank proposal.” Ergen, who has been amassing spectrum rights to launch his own wireless broadband network, also addressed the Clearwire situation. In October 2012, Sprint had begun negotiating to gain control of the portion of Clearwire it does not alredy own, in a deal that was seen as crucial to Softbank’s planned acquisition of Sprint. In January, Dish made an unsolicited bid for the wireless communications company. In a statement today, Ergen said, “Though not a condition of our proposal, we anticipate that the pending transaction with Clearwire would be completed.” Sprint shares were up in pre-market trading. The full Dish announcement is below:
DISH Network Corporation (NASDAQ: DISH) today announced that it has submitted a merger proposal to the Board of Directors of Sprint Nextel Corporation (NYSE: S) for a total cash and stock consideration of $25.5 billion. The DISH proposal clearly represents superior value to Sprint shareholders, including greater ownership in a combined company that is better positioned for the future with more spectrum, products, subscribers, financial scale and new opportunities.
The cable operator will pocket $525M and AMC Networks will end up with $175M the companies said today in an SEC filing. This was the last big question remaining after Dish Network agreed in October to pay $700M …
This is a nightmare scenario for broadcasters, although it appears from The Wall Street Journal’s report this morning that no deals are imminent. The story says that Aereo — the controversial Barry Diller-backed service that streams broadcasters’ over-the-air signals to its subscribers — has been chatting with companies including Dish Network and AT&T about potential package deals. Citing “people familiar with the matter,” the story says AT&T could offer broadband customers a deal that includes Aereo’s TV programming. Dish also could use Aereo as part of a small and low-cost package of channels that it would stream to subscribers. These ideas likely won’t move beyond the talking stage as long as broadcasters — including all of the leading networks — are asking the courts to rule that Aereo infringes on their copyrights. They say it appropriates their programming without their permission, and without paying them a dime. Aereo counters that it merely streams local signals that broadcasters already provide for free to anyone who has an antenna.
Here’s something you rarely see in Big Media: Dish Network — one of the industry’s most frugal companies when it comes to executive compensation — cut the outlays for most top execs, with CEO …
The cable programming company’s shares fell 10.4% in initial trading this morning after it released Q4 financials. AMC Networks says it generated $15.2M in net income in the quarter, -48.5% vs the previous year, on revenues of $366.7M, +8.2%. Analysts expected revenues to be closer to $370.1M. And earnings at 21 cents a share fell short of forecasts for 65 cents. AMC says it missed about $31M in affiliate fees in Q4 as a result of the fight with Dish Network, which kept AMC Networks’ channels off the No. 2 satellite service for several months ending November 1. Since the breach of contract dispute involved the defunct VOOM suite of HD channels, the litigation expenses show up in the International and Other unit where revenues fell 16.9% to $32.6M and operations ended up with a $4.3M loss from last year’s $6.9M profit. Over at the main National Networks business, revenues were up 10.8% to $338.6M with an operating cash flow of $106.7M, +5.6%. AMC says that ad sales were up 16% to $157M “due to strong demand for our original programming, primarily at AMC.” Distribution revenues were up 6.8% to $182M. But the company notes that it had to shoulder higher programming and marketing expenses as well as the temporary loss of carriage on Dish.
Hard to say how investors will read the results: There are a lot of moving parts at Dish as it teases its wireless broadband plans, promotes its Hopper DVRs, and shutters Blockbuster stores — all while it manages its core satellite TV services business. But Q4 ended up with $209.1M in net income attributable to Dish, -33.1% vs the period last year, on revenues of $3.59B, -1.1%. The revenue figure is slightly better than the $3.56B that analysts expected. Earnings, at 46 cents a share, missed forecasts for 50 cents. The company’s press release and annual report this morning mostly discuss full year results, not the quarter. Dish says, though, that earnings were hurt by rising programming costs — which execs frequently decry — as well one-time items related to its many courtroom battles. It ended the year with 14.056M subscribers, an increase of 14,000 in the quarter, which is slightly better than some analysts expected. Dish says it had 800 Blockbuster stores at the end of 2012, and recently said it will close about 300. The operation had an operating loss of $35.3M last year on revenues of $1.09B.
The Dish Network chairman says he missed the boat with his strategy for Blockbuster: He told AllThingsD’s “D: Dive Into Media” conference today that he bought the video chain out of bankruptcy because he wanted to use the stores to sell a new wireless broadband service he’s developing. But that became moot when his effort took longer than he envisioned. Meanwhile, “we were too late” to the streaming business. “Under the radar [Netflix] got critical mass and [now] can buy any program that they want to,” Ergen says. “We didn’t have the guts to buy the content and start from scratch.” That doesn’t mean Amazon’s streaming service is doomed. “They both can be successful….Amazon can subsidize it.” But Ergen says he’s a “fan” of Netflix and its business model. The financing of the original series House Of Cards was “brilliant…I feel stupid that we didn’t think of it first.” The man behind the Hopper ad-skipping DVR — being challenged in court by broadcasters who say it violates their copyrights — also got some laughs by noting that Netflix has no commercials. “They’re not getting sued. You can watch 60 Minutes in 40 minutes.”
The grinding legal struggle between Fox and Dish Network over the satcaster’s ad-skipping AutoHop and Primetime Anywhere features just became a heightened war of words. “Dish’s colorful allusions, over-the-top mockery, and baseless accusations that …
Another Black Eye For CBS: Dish Network’s Hopper DVR Wins CES Award As Trade Group Looks For Partner To Replace CNET
UPDATE, 2: 48 PM: Dish Network CEO Joe Clayton weighs in on the award, and twists the knife into CBS. He says that he appreciates International CES’ “decision to stand with the consumer” by granting the “Best of Show” award to the Hopper With Sling DVR. And he adds that he looks forward to “continuing our longstanding relationship with CNET’s editorial staff and hope they are able return to their long tradition of unbiased evaluation and commentary of the industry’s products and services.”
PREVIOUS, 11:20 AM: Here’s yet more embarrassment for CBS from its heavy-handed decision to bar its tech site CNET from giving the Internatonal CES “Best of Show” award to Dish Network’s Hopper With Sling DVR. CBS said the news site’s editors — who designate the CES award winners — couldn’t recognize the Hopper because broadcasters are suing Dish, alleging that the Hopper’s ability to automatically zip past ads on recorded shows violates their copyrights. But today the trade show gave the award to the Hopper anyway, making it a co-winner with the Razer Edge gaming tablet. (CNET editors made that the winner after CBS forced them to take the Hopper off their list.) “The CNET editorial team identified the Hopper Sling as the most innovative product of the show, and we couldn’t agree more,” says Karen Chupka, who’s the Consumer Electronics Association’s SVP for events and conferences. What’s more, the group says it will look for a new partner to replace CNET in running the annual awards. CBS’ corporate policy could “have a negative impact on our brand,” Chupka says.
CBS is going backwards to try to take its legal battle with Dish Network forward. The network today filed paperwork (read it here) in federal court in the hopes of pursuing new fraudulent concealment and inducement counterclaims against Dish and its AutoHop service. CBS says Tuesday that it would have never signed a January 2012 Retransmission Agreement with Dish if it had known the broadcast satellite provider intended to introduce the ad-skipping AutoHop feature to its subscribers later in the year. In fact, the network includes emails from its execs to Dish during the late 2011 negotiations stating that CBS was not “looking to have this arrangement include new businesses that DISH may choose to enter into in the future, whether they be Netflix-like businesses, new mobile services, or other new platforms.” By Dish not saying anything about the proposed Autohop feature after this exchange, CBS says the company committed deceit.
Blockbuster now becomes the second UK retailer this week to go into administration, the British equivalent of bankruptcy protection, after music and DVD chain HMV did the same on Tuesday. As it has in the U.S., the movie …