Dish is losing subscribers because of the retransmission dispute that has blacked out Tegna stations, Dish co-founder and chairman Charlie Ergen said.
Referring to the Tegna stations on Dish’s third-quarter earnings call Thursday, Ergen said, “they’re not up and we are losing some customers, but not as dramatic as it might have been in the past.”
Ergen said that retransmission fees continue to go up as broadcast network viewing erodes.
“We've seen viewership decline 15 years in a row on the networks and retrans go up by 1,000%. That's not sustainable,” he said. “We look at the math and we know we'll lose customers, so we know we'll lose Tegna customers.”
Ergen predicted that if viewing and retransmission fee trends continue it will kill off the networks. “The end result of this is networks -- if you fast forward 10 [years] ... -- I don't know that networks exist, maybe for local news, because they're pricing themselves out of the market.”
Retransmission is mostly a ticket that lets viewers watch their local NFL teams, Ergen said.
“Once people find a way to get football next year, that's going to be a permanent loss of viewers for Tegna,” Ergen said. “And of course, people also can go get it from the networks. They can get Peacock from NBC directly. And maybe Tegna gets revenue from that, maybe they get more revenue than they do from us, and maybe that makes sense for them.”
Ergen questioned why the networks were looking to drive viewers toward streaming services. And he noted that that is putting station owners in a difficult spot. “I'm somewhat empathetic to their plight because they don't have a real place to go, absent some fundamental changes.”
And at some point, retransmission fees will have to go down, rather than up, he contended.
“I think the moves in retrans are down, not up. And I don't know what that does to valuations, but I saw Gray publicly said 50% of their revenues are retrans. And I think that's going to come under pressure,” he said.
Dish is also in a retransmission dispute with Sinclair, but Sinclair’s stations have remained on Dish via a series of short-term extensions.
“Sinclair is bigger than Tegna and we've had a long-term relationship there. And that -- there's more conversation around that, than there is, and they're bigger and would probably have a little bit more clout and scale in the marketplace.”
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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