Hello Again, Neuman?


Dish Network chairman Charlie Ergen's decision to step down as CEO may seem like a little déjà vu, but analysts that have followed the company closely for the past several years believe the decision is in line with the mercurial executive's most recent moves.
About five years ago, Ergen decided that he needed some time to sit back and look at the big picture, hiring a former Bell Canada executive Michael Neuman to take over day-to-day operations as chief operating officer. The move surprised some analysts given Ergen's reputation as a micro-manager (he was known at the time to agonize over direct mail copy).
That experiment lasted all of eight months, with Neuman resigning abruptly and Ergen once again taking control of every aspect of the business.
Monday's announcement that Ergen has again brought on an outsider - former Sirius Satellite Radio chief Joe Clayton - to take over the day-today reins was met with a little initial skepticism, but many analysts believe that this time it is different. Ergen has been on a roll lately, buying up wireless spectrum assets and the Blockbuster  video rental chain, moves that had some analysts wondering exactly what the Dish chairman has up his sleeve. During a conference call with analysts last month, Ergen called the moves his "Seinfeld strategy," adding that like the popular sit-com, you never know what it is about until the final minutes.
While Ergen still has a reputation as a hands-on executive, some analysts believe that with all the other irons in Dish's fire, it is almost essential that he get a little help in the nuts and bolts running of the business.
"I think Charlie is happy about delegating the blocking and tackling aspects of the CEO job; he remains both chairman and primary owner," said long-time Ergen watcher and Wunderlich Securities analyst Matt Harrigan. "He's likely to focus on business plan for wireless, focusing on [the] Seinfeld angle of pulling all the strands together at the last minute."
Harrigan also noted that incoming CEO Clayton is likely to become the Wall Street face of the company, something that Ergen was reluctant to do.
"[Clayton is] likely to have more patience for that aspect of the job than Charlie," Harrigan said.
Miller Tabak media analyst David Joyce said that while Dish has gone down this road before, Ergen apparently has greater ambitions.
"Ergen is a strong character and an entrepreneur who founded a very successful company, so it's naturally hard to let go and not micromanage," Joyce said. "He does have a "Seinfeld strategy" to execute, so he should be paying more attention as to how to connect its Dish and [EchoStar] assets with Blockbuster and DBSD [North America] satellite in order to perhaps create a Netflix competitor."
Pivotal Research principal and media & communications analyst Jeff Wlodarczak wrote in a research note that no matter the title shift, Ergen is still firmly in control of Dish.
"Our opinion on Joe Clayton's track record is frankly mixed, given our experiences when he operated Sirius, but we remind investors that Dish begins and ends with Ergen and we continue to believe he will play a very hands-on role in the operation of Dish, of which he remains by far the largest shareholder," Wlodarczak wrote.
Wlodarczak added that a new CEO also could refuel speculation that Dish could eventually be for sale.
"We also highlight that if Ergen ever wanted to sell Dish Network (as mentioned previously in our research) he may not be interested in sticking around to run the business, so he needs someone to fill the role," Wlodarczak wrote.
Investors didn't appear worried either. Dish Network shares were up 60 cents each (2.1%) to $29.41 per share in early trading Monday.