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Dish vs. ESPN: The Mother of All Fee Fights?
Washington, D.C. (August 6, 2013) - Dish's eight-year carriage deal with ESPN is scheduled to end next month and it could lead to the nastiest and most important fee fight yet in the TV industry.
David Geotzl of MediaPost.com notes that relations between Dish and ESPN and Disney, which owns ESPN, have not been cordial over the years with lawsuits filed from both sides over issues such as back carriage fees and alleged unfair rates.
While it's in the best interest of both companies to keep broadcasting ESPN to Dish's 14 million plus subscribers, the acrimony between the two and Dish's interest in reducing its cost for sports programming overall could lead to an extended channel blackout
And if it does, it could encourage other TV providers to take a stand against ESPN's demands for significantly higher carriage fees to help offset its multi-billion contracts to carry the NFL, college football and other sports.
Media Post says the current Dish-ESPN deal is set to expire September 30, which would be during the 2013 NFL season. Without ESPN, Dish subscribers would be unable to watch Monday Night Football. However, Dish Chairman Charlie Ergen, a steely negotiator, has shown a willingness in the past to do without seemingly critical programming to make a point in carriage talks.
Media Post estimates that Dish is now paying an average of more than $5 a month per subscriber for ESPN, but could be asked to raise that to $7 a month or more. It's hard to believe that Ergen will readily accept that rate and it could trigger his call for ESPN to be a separate, a la carte channel, something ESPN would fiercely oppose because it would mean fewer viewers and fewer advertising/carriage dollars.
Dish could also pull a few rabbits -- or kangaroos -- out of its hat by telling ESPN that it will not subject the network to its Hopper HD DVR's automatic ad-skipping feature if it relents on higher carriage fees. Dish currently only allows subscribers to use the feature on primetime programs on the broadcast networks (ABC, CBS, Fox and NBC), which has led to lawsuits from the networks.
The more you examine the Dish-ESPN negotiation, the more thorny you see it can become, particularly since Ergen once wistfully said he could foresee a day when a TV provider did not offer any sports.
September should be an interesting month in the sports world, and not just on the field.
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