Ergen: Dish Prepared To Do Without Tribune Stations

Dish chief says Tribune not ‘super-popular' with subs

As its retransmission consent dispute with Tribune Media entered its fifth week, Dish Network chairman and CEO Charlie Ergen said the satellite company is prepared for the long-haul, adding that if necessary he could do without the channels indefinitely.

About 42 Tribune Media stations in 33 markets went dark to Dish customers on June 13 after the parties could not reach a retransmission consent agreement. Dish has said Tribune is asking for exorbitant rate increases for its broadcast channels and has chafed at its attempt to include carriage of its pay TV network WGN America in negotiations. Tribune has countered that it is only asking for fair value for its content.

Both sides have offered extensions to the existing deal while they negotiate, which have been rebuffed. Dish also has offered “baseball-style” arbitration to resolve the matter, which Tribune has declined.

In addition, yesterday Tribune Media offered to extend its previous agreement with Dish to Sept. 15, with no true-up or retroactive payments once a new deal is reached.

 “This would enable Dish to immediately restore our stations and WGN America to its network at no added expense, even as we continue to negotiate,” Tribune Media senior vice president of corporate relations Gary Weitman said in a statement. “We also put a very fair proposal on the table.  We hope Dish takes us up on our offers."

On a conference call with analysts to discuss second quarter results, Ergen said while he would like to resolve the dispute – which he called an “honest disagreement on pricing” – but is prepared to do without the networks if need be.

Ergen said WGN America is a “tweener” network, not “super-popular” with Dish subscribers even as Tribune has invested in original programming to transform the former superstation into an entertainment network.

The Dish chief added that the longer the dispute lasts, the less valuable the channels become.

“If we ever get into a take-down situation, we have to be prepared that we will never put that channel back up again,” Ergen said on the call, adding that in the Tribune dispute customers that WGNA have left Dish already. “The value of putting WGN America back up is declining by the day.”

Ergen said Tribune larger network affiliates – it has about 14 Fox, 13 CW, 6 CBS, 3 ABC and 2 NBC stations – could be more valuable as football season approaches, but for the moment, not having them hasn’t had much of an impact.

“We are certainly prepared to live without Tribune and WGN America,” Ergen said. “We know we will lose some subs as a result of that, we’d save a lot of money in terms of fees. If there is a deal that can be done that is market priced and takes into consideration the expenses we’ve had up to now … then maybe we can piece something back together again.”

Weitman added that he too was hopeful a deal could be reached.

"We take no joy from Dish's loss of nearly 300,000 subscribers in second quarter of this year," Weitman said in a statement. “Nothing would make us happier than to get our valuable programming back up on Dish's network and to help Dish reverse this trend.  We simply ask that Dish pay us fair market value for our programming, which includes everything from the upcoming Olympics to NFL football in 22 of our markets to acclaimed entertainment, such as our hit shows Underground and Outsiders on WGN America.”  

Dish reported a loss of about 281,000 net video subscribers in the second quarter, more than three times the losses it had in the same period last year. Dish attributed some of those losses to seasonality and new customer credit policies aimed at attracting high-quality subscribers as well as carriage disputes with Tribune and NFL Network.