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News Update
Analyst: Dish Will Blackout Disney, ESPN This Month
By Swanni


Washington, D.C. (September 17, 2013) - This is an update on our earlier coverage of the possible fee fight between Dish and the Disney-owned ESPN. See earlier articles below.

A Wall Street hedge fund manager yesterday tweeted that he's hearing that Dish will blackout Disney at the end of the month when their programming agreement expires.

"Negotiations are not going well," wrote Mike Bergen of Bergen Capital, an investment capital firm, which has more than 20,000 followers on Twitter.

Bergen's comments reflect a growing belief that Dish and Disney will not work out a deal. The satcaster's eight-year carriage deal with Disney, which owns ESPN, the Disney channels, and ABC affiliates, expires at the end of the month and some analysts believe a classic fee fight is inevitable.



At the center of the impasse is Dish Chairman Charlie Ergen who has publicly railed against rising programming fees, particularly with sports networks, and could use the Disney negotiations to make a point that rising fees must stop now.

Ergen has not been shy about allowing his subscribers to lose access to even popular channels for a short periods to put pressure on content companies to keep their costs down. He has also questioned the wisdom of paying excessive fees to carry sports networks, such as ESPN, which are not viewed by a majority of the audience, although their core audiences are zealously loyal.

See our earlier articles on this subject below.
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News Analysis
Is Dish's Charlie Ergen Crazy Enough to Drop ESPN? Yes!
By Swanni


Washington, D.C. (September 6, 2013) - This is an update on our earlier coverage of the possible fee fight between Dish and the Disney-owned ESPN. See earlier article below.

Dish and Disney. You will likely hear those two words tossed together quite a bit in the next three weeks. The satcaster's eight-year carriage deal with Disney, which owns ESPN, the Disney channels, and ABC affiliates, expires at the end of the month and some analysts believe a classic fee fight is inevitable.

The Wall Street Journal and Bloomberg News both published lengthy articles on the players and their concerns in the last day but the pieces, while well researched, did not offer any new revelations on the progress of negotiations.

John Skinner, ESPN's president, has been running around telling anyone who will listen that he thinks that the negotiations are going well. But that's what content companies normally say at this point; the idea is to put the pressure on the other side of the table.

As for Dish, they have been more tight-lipped, choosing to refer reporters to a stale comment from Dish CEO Joe Clayton from last month that said he's hopeful negotiations are going in the right direction.

But this show really isn't about John Skinner or Joe Clayton. It's the Charlie Ergen Show -- and Ergen alone will decide how it ends.

Ergen has railed against the rising costs of programming, particularly sports, even to the point of wistfully speculating that some TV provider one day will dump all of its sports programming out the back door to save money. Some TV provider...

I don't expect Ergen will ever do that, but the Disney negotiations are the perfect venue for him to practice his "I'm crazy; I'll do anything" style of deal making. Over the years, Ergen has willfully engaged in legal battles with TiVo (lost); DIRECTV (case dropped); the broadcast networks (case over ad-skipping Hopper HD DVR still pending) and a host of other major industry companies, including Disney itself (he lost that one, too.)

Ergen's legal department is the busiest place in America and he likes it that way. Lawsuits, protracted procedural battles, and public arguments are all important things in his eyes because they serve to make points, points that can later lead to more efficient financial practices or business opportunities.

So, yes, Charlie Ergen is just crazy enough to tell his subscribers at the end of the month that they can no longer watch ESPN. Or some of their ABC affiliates. Or the Disney channels (Oh, no, not Doc McStuffin!) He will say it with pride, too, adding that the channel blackout, however long, will eventually save them money.

He will announce that channel blackout even before Disney does and he will have a smile on his face because he will believe with everything in his heart that it's good for his company in the long run. And that it will strike a blow against rising sports programming costs.

It may not happen this way. Dish and Disney may realize that both run risks if they can't come to a new deal. But the problem with that is: Charlie Ergen lives for risks.

See our earlier article on this subject below.
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News Analysis
Dish vs. ESPN: The Mother of All Fee Fights?
By Swanni


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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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at
swann@tvpredictions.com or at 703-505-3064.



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