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Charlie Ergen: ‘Retrans Has Peaked’

Charlie Ergen

(Image credit: Dish)

Dish Network chairman Charlie Ergen didn’t pull any punches Thursday in the company's Q1 earnings call, predicting the demise of retransmission consent and likening wireless carrier T-Mobile to the lead character in Dr. Seuss' How The Grinch Stole Christmas.

Ergen had a lot to unpack on the call, as the company has been under pressure concerning its wireless partner T-Mobile’s decision to shutter its CDMA network on Jan.1, 2022 -- affecting about 9 million Boost Mobile and Ting Mobile prepaid wireless customers -- and facing some upcoming carriage negotiations with Sinclair Broadcast Group’s RSNs. 

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Asked about the effect of programmers putting once exclusive linear content like NFL Football and other programming on streaming services, Ergen, who also said  cable network affiliate fees should go down by 50%, said it made it tough for small broadcasters to survive.

“I’m very empathetic to broadcasters, particularly local broadcasters,” Ergen said. “A lot of them started as small businesses and have grown their business. They’re not only having to deal with legacy linear TV, but they are having to compete against their big owners. I think they have to come up with strategic solutions to reinvent themselves. We’d like to work with them to do that. But retrans has peaked.”

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Ergen pointed out that Dish was one of the first distributors to say that regional sports was on its way out “and two or three years later people figured that out. Retrans has just peaked.”

Ergen has predicted the demise of retrans in the past, but his comments, coming as more and more programmers are relying on direct-to-consumer offerings, it could finally come true. 

More and more programmers are going direct-to-consumer, including broadcasters like ViacomCBS with Paramount Plus and NBC with Peacock. As more and more customers cut the pay TV cord, that has led to lighter retrans fees. Kagan, a unit of S&P Global Market Intelligence has said it expects retrans fees to rise just 2% in 2021.   At the same time, there are many operators that are bracing for big increases in retrans fees over the next few years to help broadcasters pay for the recently signed NFL rights deal, which goes into effect in 2023. 

Ergen next commented on Dish’s ongoing dispute with T-Mobile, regarding the wireless  carrier’s decision to discontinue its CDMA network by the end of the year. https://www.nexttv.com/blogs/dish-wireless-pushes-forward Dish’s prepaid business -- Boost Mobile and Ting Mobile -- rely on that network to deliver service and the company has warned that it would have to purchase millions of new handsets for those customers once the transition is made. T-Mobile has said the impact would be on less than 1 million of Dish’s 9 million prepaid wireless customers.

Ergen said  the carrier's numbers were “way low” and called its claim that the government was requiring them to shutter the network false. Ergen later likened T-Mobile to Seuss’ Grinch, noting that at the beginning of the story, the Grinch’s heart was three-sizes too small.

“Once they got their merger done, they looked like every other big company,” Ergen said, adding that like the Grinch, who stole all the toys from the children of Whoville’s (even little Cindy Lou Who’s), T-Mobile was snatching phones out of economically distressed customers’ hands. 

"The Un-carrier has become the Un-caring Carrier, and that’s a shame” Ergen said, riffing on T-Mobile’s marketing tag line. He hoped that like in the Seuss story, T-Mobile will see the light and reconsider the CDMA shutdown. 

Ergen said he had been reading The Grinch to his granddaughter, adding that during that time he saw the Grinch in a different color.  “Instead of green, I kept seeing him in magenta,” Ergen said. “I kept seeing a magenta Grinch.” 

T-Mobile’s logo is magenta.