The conclusion in a report late today from Craig Moffett is a big change for the MoffettNathanson Research founder – and could weigh on both satellite distributors tomorrow. Moffett has been Wall Street’s leading evangelist for a DirecTV-Dish Network merger: In June he upgraded both companies, urging investors to buy their shares, in the belief that Dish Chairman Charlie Ergen would pursue a “spectacularly lucrative” deal with DirecTV after he failed to gain control of Sprint or an influential stake in wireless broadband company Clearwire. The idea swept through Wall Street, especially after the company chiefs said they wouldn’t rule it out.
But Moffett just conceded defeat. He downgraded both companies to “neutral” and lowered his price targets (by 7.4% to $63 for DirecTV and 8.5% to $43 for Dish). The reason: Ergen’s passion to create a wireless service “shows no sign of cooling.” He continues to amass rights to wireless airwave spectrum, and the more he buys “the less feasible it becomes for Dish to sell its trove.” Federal officials Read More »
For the second time in less than a week, Dish Network is claiming legal victory against one of the big broadcasters. On September 18th, it was ABC, today it’s Fox. A federal judge Monday spared the satellite provider the preliminary injunction requested by Fox against its ad-jumping Hopper DVR services. As has become the norm in the various Hopper cases, the ruling by Judge Dolly M. Gee was filed under seal for the time being so confidential and proprietary info could be stripped out. While Gee denied the injunction she did indicate to the parties’ lawyers that she believed Fox’s case had merit and could be compensated with damages rather than agreeing to the broadcaster’s motion. “We disagree that the harms caused by Dish’s infringing services are completely compensable by damages, and as a result we are looking at all options. We will file a response in due course,” a Fox spokesperson told me. Dish took a much less nuanced approach in responding to Monday’s decision. “Today’s decision is the fourth in a string of victories for consumers related to our Hopper® Whole-Home DVR platform. DISH is pleased that the Court has sided again with consumer choice and control by rejecting Fox’s efforts to deny our customers’ access to the DISH Anywhere and Hopper Transfers features. We will continue to vigorously defend consumers’ right to choice and control over their viewing experience,” said Dish’s EVP and general counsel R. Stanton Dodge in a statement Monday. Today’s ruling comes from a hearing on the matter held back on April 19th.
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2nd UPDATE, 4:34 PM: This is far from over, ABC says. Dish Network may be claiming a win in today’s split opinion that saw a motion for preliminary injunction by ABC denied but the network says there’s more legal battles to come. Read ABC’s statement here and see Dish’s below:
Today’s ruling is only a preliminary decision and the first step in the judicial process. We continue to firmly believe that DISH’s AutoHop and PrimeTime Anytime services breach our retransmission consent agreement with DISH, infringe upon ABC’s copyrights, and unfairly compete with the authorized on-demand and commercial-free options currently offered by ABC and its licensees.
UPDATE, 1:58 PM: It might have been a split opinion delivered today in federal court for much sued Dish Network’s Hopper service, but the satellite provider is claiming victory. Read the statement I just got from Dish’s EVP and general counsel R. Stanton Dodge:
This decision is yet another victory for American consumers, and we are proud to have stood by their side in this important fight over the fundamental rights of consumer choice and control. This is the third federal court decision that has sided with DISH on consumers’ right to enjoy television as they want, when they want, including the right to skip commercials, if they so choose.
PREVIOUSLY, 12:59 PM: A mixed result was delivered today for Dish Network’s Hopper in federal court. On the one hand, the satellite provider was spared the preliminary injunction requested by ABC against its ad-jumping DVR service. On the other hand, NY-based District Court Judge Laura Taylor Swain Wednesday denied Dish’s motion to deny CBS’ desire to untangle itself from a January 2012 Retransmission Agreement with the provider. Read More »
21st Century Fox’s sports service could launch this Saturday without three of the four largest pay TV distributors — which collectively have about 46M subscribers or about 54% of the industry total. Time Warner Cable, DirecTV, and Dish Network are still in discussions to carry Fox Sports 1, according to Sports Business Daily. If there’s no agreement by the end of this week, the distributors would offer a stripped-down version of Fox’s motorsports channel Speed, which is being converted to Fox Sports 1. The publication says that Fox wants distributors to pay a monthly fee of 80 cents per subscriber for Fox Sports 1, rising to $1.50 in a few years. Speed costs just 23 cents. Fox Sports Media co-President Randy Freer sounded confident about reaching carriage deals when he spoke last week to analysts about his plans. Fox Sports 1 “will be available in up to 90M homes at launch,” he told them. Execs also said that they expect the channel to become profitable in 2016.
The companies say that Raycom stations will be back on Dish Network “overnight,” and didn’t provide any details about the agreement. The broadcaster owns or controls 53 stations in 36 markets including ABC, CBS, Fox, NBC, CW, and MyNetworkTV affiliates in cities including Cleveland, Toledo, Honolulu, Tucson, Baton Rouge, West Palm Beach, Louisville, and Memphis. The stations went dark on Dish on August 1 when the previous carriage contract expired. Dish accounts for about 15% of Raycom’s viewers, according to data from SNL Kagan.
Despite another rejection last month of its last attempt to pull the plug on Dish Network’s Hopper, 21st Century Fox is stepping back into the legal fray in its battle against the ad-jumping DVR service. The broadcaster filed a brief with the Ninth Circuit Court of Appeals earlier this week requesting a brand new review of the July 24 ruling to be heard by all the court’s judges. The previous ruling shut down Fox’s aim for an injunction against the Hopper. Perhaps more importantly, the panel from the Ninth Circuit also said that the provider itself was not infringing on copyright because the services’ users are actually the ones making copies of the programming in question and that’s OK under fair use. For Fox, that was an error and raised the stakes even higher. “The panel announced two unprecedented rules of law that threaten the creation and licensing of television shows, movies, books, software, or other copyrighted content,” said the August 7 filing.
Related: Fox Loses Latest Effort To Block Dish Network’s Hopper Ad-Zapping DVR Read More »
Investors are becoming so obsessed with the idea of a DirecTV-Dish Network merger that it seems to be just a matter of time before the companies succumb. Questions about the possibility kept popping up in Dish Network’s quarterly earnings call yesterday. Company watchers “seem to be fixated” on the subject, Brean Capital’s Todd Mitchell says. And execs don’t seem to mind. Last week DirecTV CEO Michael White said he’d “never say never.” And Evercore Partners’ Bryan Kraft says he has “never heard [Dish Network Chairman Charlie Ergen] speak as openly and positively regarding the possibility of a combination with DirecTV” as he did yesterday. The FCC blocked a satellite TV merger in 2002 on the grounds that it would leave many rural subscribers, who don’t have cable, with just one pay TV provider. But Ergen says that the business is “materially different” than it was then. Verizon FiOS and AT&T U-verse serve many markets. “And then of course, you have almost an unlimited number of people now on digital Internet getting into the business, whether it be from Netflix to Hulu to Amazon to everything else that you can do on the Internet,” Ergen says. “And that’s only going to grow.” Later he added that “there’s not any question that putting Dish and DirecTV together makes a lot of sense…. If you just wanted to create short-term value, that would be probably your No. 1 option.” Read More »
This was a lousy day for DirecTV after it reported lower-than-expected earnings, with especially weak results in Latin America. But CEO Michael White gave investors at least one reason to stick with the company: He signaled in a call with analysts that he’d be receptive to the idea of a merger with Dish Network. “I don’t think it’s productive for me to speculate what regulators may or may not do, but the competitive landscape is very different than it was 10 years ago” when the FCC rejected a Dish-DirecTV merger plan, he said. For one thing, ”the balance [of power] between content distributors and providers is out of whack.” He has long charged that programmers are demanding dangerously high new fees for their content –a position he reiterated today. “I’ve seen more customer complaints about the price increases,” he says. “My own view is that it’s not going to change in the short term. But it’s clear that this isn’t sustainable beyond the next couple of years. Something is going to have to give.” He adds that Liberty Media’s John Malone, who wants cable and satellite companies to consolidate to help them fight programmers, “is 100% correct. Scale matters.” So does technology, especially as DirecTV considers strategies to avoid paying high retransmission consent fees to broadcasters. It has considered offering customers antennas to receive local signals for free. In addition, “we looked at what Aereo is … Read More »
The impasse in contract negotiations left Dish Network customers unable to watch programming from Raycom Media‘s 53 stations in 36 markets beginning at midnight. The broadcaster owns or controls ABC, CBS, Fox, NBC, CW, and MyNetworkTV affiliates in cities including Cleveland, Toledo, Honolulu, Tucson, Baton Rouge, West Palm Beach, Louisville, and Memphis. The issue? Money, of course. Dish “has offered to pay Raycom the same rates as our primary competitors; yet Raycom has stalled negotiations, refusing to accept that fair offer,” says Director of Programming Sruta Vootukuru. Raycom counters that it has agreements “with nearly every distributor in our markets, but to date Dish Network has refused to enter into an agreement with us.” Dish accounts for about 15% of Raycom’s viewers, according to data from SNL Kagan.
Related: Time Warner Cable, CBS Again Extend Deadline In Fee Dispute
21st Century Fox had hoped to persuade a federal appeals court in LA to overturn a decision that allowed Dish Network to keep selling its Hopper DVR while the companies battle over Fox’s claim that it infringes on its copyrights and breaches contracts. But the Ninth Circuit Court of Appeals ruled that Fox didn’t show that it was likely to win its case against the Hopper, which can automatically jump past commercials on recorded broadcast network shows — undermining the value of the ads. Fox says that it is “disappointed in the court’s ruling, even though the bar to secure a preliminary injunction is very high. This is not about consumer choice or advances in technology. It is about a company devising an unlicensed, unauthorized service that clearly infringes our copyrights and violates our contract. We will review all of our options and proceed accordingly.” Fox was appealing a November ruling by U.S. District Court Judge Judge Dolly Gee who refused to block sales of the Hopper, even though she agreed with Fox that Dish has likely committed copyright infringement. Dish says that consumers already have a right to skip over commercials, and its technology simply makes the process easier. “This decision is a victory for American consumers, and we are proud to have stood by their side in this important fight over the fundamental rights of consumer choice and control,” says Dish … Read More »
John Malone is the largest individual investor in DirecTV and a former kingpin of pay TV, so why not offer advice to the satcaster’s lone rival? That’s just what he did Thursday at Allen & Co.’s annual mogul gathering in Sun Valley. The Liberty Media chairman told reporters that he urged Dish Network chairman Charlie Ergen to merge with DirecTV for the greater good of the pay-TV industry. “It would be good if DirecTV could combine with Echo or Dish or whatever Charlie calls it now just because scale economics in the media business drives down costs and makes it possible for larger investment,” Malone said, according to Bloomberg. “You need larger — I’m not saying monopoly players — but you need larger players.” Combining the satellite rivals would create the world’s largest pay-TV company, which Malone says would give the merged company increased power over programming and carriage decisions. It also would provide Dish with an opportunity to grow following its failed efforts to buy Sprint and a major stake in wireless broadband company Clearwire. But the FCC might object to a Dish-DirectTV combo. Regulators rejected their merger effort 11 years ago saying it would leave many rural viewers with just one pay TV provider. Malone clearly has deals on his mind. He’s known to be exploring … Read More »
Less than a week after withdrawing its bid for wireless broadband provider Clearwire, the No. 2 satcaster is taking to the skies for a new partnership. Dish Network and Southwest Airlines unveiled a promotional deal today in which the carrier will offer live TV via satellite, paid for by Dish. In return, travelers will see air a 30-second Dish spot when they start watching, and the satellite provider’s ads will show up in confirmation emails and at airports. The promotion, which runs through September, will give passengers access to 14 live channels and 75 on-demand shows on their phones or tablets during about 60% of flights on Southwest, which carries more than 100 million passengers annually.
Related: Dish Network Unveils Social Media App For Its Hopper DVR
The wireless broadband company is down 2.2% in after hours trading following Dish Network‘s announcement that it has taken its $4.40 a share offer off the table. Dish says that it made its decision after Clearwire’s board recommended that investors accept a $5 offer from Sprint, which already owns about half of Clearwire‘s stock. Sprint’s offer valued Clearwire at more than $14B. The developments pose a dilemma for Dish Chairman Charlie Ergen as he tries to create a national wireless broadband service. He has been amassing airwave spectrum rights but has said that he needs additional licenses. He had hoped to secure that by acquiring a large minority stake in Clearwire – and by acquiring Sprint. But Japan’s SoftBank is poised to win the mobile phone provider after it outbid Dish.
The tug of war over wireless broadband provider Clearwire just became more interesting, and precarious for Dish Network. Sprint has raised its offer for the 50% of Clearwire it doesn’t already own to $5 a share — valuing the wireless broadband company at more than $14B — which tops Dish Network’s $4.40 a share bid. That led Clearwire’s board today to switch sides: It now recommends that shareholders support Sprint instead of Dish. They’ll have a chance to vote on July 8 following the company’s decision to postpone a June 24 special meeting. “The amended agreement with Sprint clearly acknowledges the significant value present in Clearwire – from our deep portfolio of wireless spectrum to the tremendous amount of progress the Clearwire team has made in improving our operations and beginning the construction of our next-generation 4G LTE network,” CEO Erik Prusch says. In addition, shareholders owning about 9% of Clearwire have said that they’ll support Sprint. Between these investors — and others including Comcast and Intel who’ve supported the wireless phone company — Sprint believes that a majority of independent shareholders will support it over Dish. If they don’t, then Clearwire must pay Sprint a $115M break-up fee. Read More »
Charlie Ergen’s Dish Network has been playing two games at once with Sprint Nextel: a bidding war with SoftBank for the entire company, while also attempting to acquire Sprint’s stake in spectrum-holder Clearwire. Missing today’s Sprint-imposed deadline to counter SoftBank doesn’t mean Dish can’t still bid on the No. 2 mobile services provider, but the company says it will “focus our efforts and resources on completing the Clearwire tender offer.” Dish has offered $4.40 a share for Sprint’s Clearwire stake as the satellite provider seeks to amass spectrum rights to launch its own wireless broadband network.
The satellite company isn’t ready to give up on the single-screen TV viewing experience yet. It just rolled out an app, called Social, that it says is the industry’s “first and only set-top app that delivers on-screen social content relevant to the show or channel a viewer is watching.” Subscribers who have Dish’s Hopper Whole-Home HD DVR can keep their eyes on the TV screen to watch a program while they also read and write posts to Facebook and Twitter (up to four accounts apiece). When the app is open, they’ll have three options on the right side of the screen: “Now Watching” will offer the Twitter feed for the show the user is watching. “My Twitter” will enable the viewer to see and send tweets on his or her personal Twitter feed. And “My Facebook” offers similar functionality for Facebook. At the bottom on the screen users will see a data bar with statistics and information including, as Dish describes it, “the top areas in the country where people are Tweeting about the program, the program’s sentiment rating, percentage of Tweeters by gender and frequency of Tweets.” Dish’s Director of Product Marketing and Management Jimshade Chaudhar says that last year “Twitter saw 32 million Americans tweet about TV programming, an incredible display of consumer interest in wanting a more social experience from TV. Through our Social app, we’ve made it easier for consumers to follow social conversations and post … Read More »
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 »
It’s a small step, but in the right direction as far as Dish Network is concerned. The satellite company says that it received a non-disclosure agreement from Sprint Nextel, which makes it easier for the companies to share private information that might strengthen Dish Network’s offer. The Sprint board’s Special Committee examining the unsolicited $25.5B offer – designed to top SoftBank’s $20B acquisition proposal — says that it is “reviewing this offer in good faith,” according to Dish. Company Chairman Charlie Ergen adds that he’s “confident that the Sprint board will share our view that this proposal is superior.” A combination with Sprint “will benefit from synergies and growth opportunities estimated at $37 billion in net present value that are not attainable through the pending SoftBank proposal.” The company’s financial adviser Barclays says that it’s confident it can raise the cash. Dish shares are down 1.4% in after hours trading, potentially wiping out the gain it made during the trading day.
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.
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