Ergen waiting out Viacom
EchoStar chief discusses future
By Kris Hudson
Denver Post Business Writer
Sunday, March 07, 2004 -
WASHINGTON - Charlie Ergen rarely picks a small fight. Ergen's EchoStar Communications Corp., which delivers satellite TV to 9 million subscribers under the Dish Network brand, has taken on CBS parent Viacom in a bitter legal battle.
On Thursday, Ergen accused Viacom of "extortion at the highest level." He claims that for EchoStar to carry CBS, Viacom is pressuring EchoStar to pay for and carry many other Viacom-owned channels. Viacom has declined to comment.
Midnight Monday is the deadline for expiration of an injunction that bars Viacom from pulling its channels off Dish Network. sg If Viacom pulls the plug, Dish viewers could be missing 20 channels, including CBS, MTV, VH1 and Nickelodeon.
The uncertainty has trimmed EchoStar's stock price, which closed Friday at $34.55, down 4 percent.
An even bigger strategic issue looms for the company Ergen co-founded in Colorado two decades ago. EchoStar, based in Douglas County, may need to find a merger or acquisition partner as programming and distribution companies merge into bigger and bigger entities.
So what will become of EchoStar - Colorado's fourth-most valuable company, with a market value of $16.74 billion? No one has more influence over the answer than Ergen, who exerts 90 percent voting control over EchoStar. He fielded questions last week at a luncheon sponsored by the Progress and Freedom Foundation, a Washington think tank.
Q: If the board of the Walt Disney Co. accepts cable giant Comcast Corp.'s unsolicited acquisition bid, and federal regulators approve it, how might that affect EchoStar? Will you need to combine with another company that generates TV programming for EchoStar to deliver?
ERGEN: We'd like to be Switzerland and let our customers know they can get whatever they want. The government may not allow that. (If Comcast buys Disney) we either buy a company or sell a company, and we're down the road. But I don't think it's good public policy.
Q: EchoStar and DirecTV now are reselling high-speed Internet access offered by big phone companies. Will satellite-TV companies offer Internet access on their own?
ERGEN: We believe that satellite has a role to play in broadband in America. Initially, we believe it is more of a rural product for 10 (million) to 20 million homes.
Q: There is a deadline approaching (midnight Monday) for expiration of the injunction barring Viacom from pulling its channels from Dish Network. This stems from negotiations to extend your carriage deal, which expired Dec. 31. You say Viacom threatened to pull its programming so Dish customers would not see the last Super Bowl if you didn't agree to carry certain other Viacom channels. You also say Viacom is seeking double-digit rate increases from Dish. Have talks between the two sides progressed?
ERGEN: I'm not really feeling good about them now. The last three years, we've given Viacom more customers than the cable industry and DirecTV combined. Why are my customers paying a 10 to 15 percent premium?
If you're going to use the Super Bowl as a weapon, we don't think that's right. We're willing to point out what we think is an injustice. Our stock price may go down, and we may lose customers. But I wake up and look in the mirror and say, "I feel good about this decision."
Read the rest at http://www.denverpost.com/Stories/0,1413,36~33~1999715,00.html#
EchoStar chief discusses future
By Kris Hudson
Denver Post Business Writer
Sunday, March 07, 2004 -
WASHINGTON - Charlie Ergen rarely picks a small fight. Ergen's EchoStar Communications Corp., which delivers satellite TV to 9 million subscribers under the Dish Network brand, has taken on CBS parent Viacom in a bitter legal battle.
On Thursday, Ergen accused Viacom of "extortion at the highest level." He claims that for EchoStar to carry CBS, Viacom is pressuring EchoStar to pay for and carry many other Viacom-owned channels. Viacom has declined to comment.
Midnight Monday is the deadline for expiration of an injunction that bars Viacom from pulling its channels off Dish Network. sg If Viacom pulls the plug, Dish viewers could be missing 20 channels, including CBS, MTV, VH1 and Nickelodeon.
The uncertainty has trimmed EchoStar's stock price, which closed Friday at $34.55, down 4 percent.
An even bigger strategic issue looms for the company Ergen co-founded in Colorado two decades ago. EchoStar, based in Douglas County, may need to find a merger or acquisition partner as programming and distribution companies merge into bigger and bigger entities.
So what will become of EchoStar - Colorado's fourth-most valuable company, with a market value of $16.74 billion? No one has more influence over the answer than Ergen, who exerts 90 percent voting control over EchoStar. He fielded questions last week at a luncheon sponsored by the Progress and Freedom Foundation, a Washington think tank.
Q: If the board of the Walt Disney Co. accepts cable giant Comcast Corp.'s unsolicited acquisition bid, and federal regulators approve it, how might that affect EchoStar? Will you need to combine with another company that generates TV programming for EchoStar to deliver?
ERGEN: We'd like to be Switzerland and let our customers know they can get whatever they want. The government may not allow that. (If Comcast buys Disney) we either buy a company or sell a company, and we're down the road. But I don't think it's good public policy.
Q: EchoStar and DirecTV now are reselling high-speed Internet access offered by big phone companies. Will satellite-TV companies offer Internet access on their own?
ERGEN: We believe that satellite has a role to play in broadband in America. Initially, we believe it is more of a rural product for 10 (million) to 20 million homes.
Q: There is a deadline approaching (midnight Monday) for expiration of the injunction barring Viacom from pulling its channels from Dish Network. This stems from negotiations to extend your carriage deal, which expired Dec. 31. You say Viacom threatened to pull its programming so Dish customers would not see the last Super Bowl if you didn't agree to carry certain other Viacom channels. You also say Viacom is seeking double-digit rate increases from Dish. Have talks between the two sides progressed?
ERGEN: I'm not really feeling good about them now. The last three years, we've given Viacom more customers than the cable industry and DirecTV combined. Why are my customers paying a 10 to 15 percent premium?
If you're going to use the Super Bowl as a weapon, we don't think that's right. We're willing to point out what we think is an injustice. Our stock price may go down, and we may lose customers. But I wake up and look in the mirror and say, "I feel good about this decision."
Read the rest at http://www.denverpost.com/Stories/0,1413,36~33~1999715,00.html#
