Ergen: Univision Blackout Is ‘Probably Permanent’

Dish Network chairman Charlie Ergen isn’t kidding around when it comes to the high cost of programming, telling analysts Friday that its dispute with Spanish-language broadcaster is “probably permanent.”

Univision channels went dark to Dish customers on June 30, when the two failed to reach a retransmission consent agreement. In the flurry of rhetoric from both sides since the blackout, Dish has claimed that Univision has lost half of its audience; while Univision claims it is the third most-watched network by Dish subscribers.

“The short answer is yes, this is probably an inflection point,” Ergen said on Dish’s Q2 earningsconference call. “I believe this one, personally, is probably permanent.”

Ergen was repeating what Dish had said earlier in the day when it issued its 10-Q earnings report with the Securities and Exchange Commission: that it expected the loss of the Spanish-language programmes content to be permanent.

In a statement prior to the earnings call, Univision said

“We at Univision do not take any pleasure in Dish TV’s loss of nearly 200,000 subscribers in the second quarter,” the broadcaster said in a statement. “In fact, we are concerned Dish’s decision to turn its back on Hispanic audiences—a growing community that already accounts for nearly 20% of Dish’s subscriber base—will exacerbate such losses going forward (as Dish itself alerted its shareholders in its SEC filing). We are confident a renewed partnership that leverages our top-rated news, sports and entertainment programming will not only mitigate ongoing subscriber losses but propel Dish to greater long-term growth.”

The dispute is largely around pricing, but Ergen said on Dish’s conference call that Univision programming is available elsewhere – including a $7.99 per month direct-to-consumer offering from the programmer – which diminishes its value to the satellite company. In addition, Netflix has been increasing its Spanish-language offerings, which further lessen the value of other networks.

“Customers that really want Univision at Dish will find another way to get the product,” Ergen said, adding that he expects similar disputes in the future.

“This will not be the first skirmish,” Ergen said. “Every single provider has the same issue with programmers.”

Ergen repeated claims that Univision has lost audience, especially since it failed to renew its rights deal for the World Cup, and that it has undergone management turmoil in recent months. He continued that Dish’s decision not to pay what it said was a demand for a 75% rate increase for the Univision channels, wasn’t personal, just business.

Univision has claimed that Dish rejected an offer to extend its old deal while negotiations continued, and has said in the past that the company refused to meet with executives to hash out the matter.

"Charlie Ergen has a good perspective on the challenges facing the broader media industry," Univision said in a later statement. "At Univision, we’re in the business of developing, acquiring and delivering the very best content to serve the Hispanic community, which also happens to be a highly coveted consumer. And as good distribution partners, we price that best-in-class Spanish-language content appropriately. Our team remains in active discussions with Dish to get back to serving its large Hispanic subscriber base with the best news, sports and entertainment."

Ergen recited a litany of reasons for the decision, including the declining popularity of Univision’s telenovela programming – which Ergen said was “long in the tooth” – to the loss of several top executives, including its CEO Randy Falco, chief revenue officer Tonia O’Connor and chief content officer Isaac Lee.

Related: Univision to Lay Off 6% of Work Force

He added that he has not heard from Univision’s new CEO, former Media General chief Vincent Sadusky, since he took the helm in June.

“That doesn’t sound like a relationship that they want to proceed with,” Ergen said.