Dish Network chairman Charlie Ergen told analysts Monday that he was “disappointed” that Sinclair Broadcast Group has decided to negotiate its upcoming retrans agreement in the press, adding that there is still some hope that a deal can be reached.
“I’m disappointed that they put a press release out that they expect the networks to come down. I think we have until Aug. 16,” Ergen said on the conference call. “Many negotiations come down to the wire, so we’re still going to bargain in good faith.”
That was likely a nod to Federal Communications Commission requirements that all parties in retrans agreements negotiate in good faith. Ergen added that there are other ways for his customers to receive the broadcast channels, either via antennas, Locast, or streaming services like Paramount Plus and Peacock.
But many analysts had hoped that the Sinclair RSNs -- which Dish dropped in 2019 -- would be included in the retrans talks. Ergen said he sympathized with the broadcaster, adding that regarding the RSNs, Dish first negotiated for the Fox Sports RSNs when they were owned by Disney, which purchased them as part of its $71.3 billion buy of certain Fox assets in March 2019. By the time Disney sold those channels to Sinclair later in May 2019, Ergen said reaching a carriage deal for the channels became a moot point.
“By the time Sinclair owned it and was able to negotiate it, our customers that wanted regional sports had left,” Ergen said. “There was no way in fairness to our customers that we could tax them in a basic package, when almost nobody who wanted regional sports was left.
“I think there are innovative ways to reinvigorate the regional sports networks, Sinclair themselves have talked about it in a direct to consumer product,” Ergen continued. “We’ll continue to work with Sinclair to the extent they want to try to work with us in a win-win situation. But if not, … my expectation and hope would be that ultimately the companies try to resolve all the issues of concern to both parties.”
Ergen was mostly talking about the broadcast channels, but he said he would be open to any deal that included the RSNs, within reason.
“If there are some opportunities in regional sports that make sense for us and Sinclair, we’re happy to talk about anything that’s interesting and helps our customers, but we’re not interested in taxing our customers when they don't watch the channels,” Ergen said. “Our customers will understand that. We may lose some customers if the networks go down. We’ve been through this before. The impact of [losing] local channels used to be devastating, and it’s still pretty bad, but it's not the same. And there are other alternatives.”
Later, Ergen said that the dispute with Sinclair is largely due to the fees they are requesting, and not an attempt to bundle the RSN networks with broadcast channels.
“At the end of the day it’s about money, it’s about economics,” Ergen said. “That hasn’t changed in any programming negotiation that I’ve ever been involved in.”
In a press release of its own issued after the conference call, Dish said Sinclair is demanding nearly $1 billion in retrans fees for its stations, which it claims is a “massive increase,” from its previous agreement.
“Sinclair is making these outrageous demands, turning its back on its public interest obligation and putting customers in the middle of its negotiations,” Dish TV group president Brian Neylon in a press release. “...This negotiating tactic is used to upset our customers and intimidate us into accepting outrageous contract terms — a tactic the channel owner uses frequently.”
Dish directed customers to its DISHPromise.com website for more information, adding that it still hoped a deal could still be reached.
“There is still time to reach an agreement with Sinclair that is fair for all parties involved, especially our customers,” Neylon said. “We will continue to fight on behalf of Dish customers to keep TV bills as low as possible. Despite the fact that Sinclair has walked away from the table multiple times, we stand ready to negotiate in good faith.”
Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.
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