By Dow Jones Business News,
February 21, 2014, 06:14:00 PM EDT
Dish Reports Higher Profit, Unease with Comcast Deal -- 4th Update
By Shalini Ramachandran
Dish Network Corp. Chairman Charlie Ergen came out swinging against the Comcast-Time Warner Cable merger and hinted
that Dish could reattempt a merger with satellite-TV rival DirecTV.
The cable megadeal "certainly doesn't hurt the case for consolidation" of the two satellite-TV giants, Mr. Ergen
said. "If you take the No. 1 and 4" players in pay TV and put them together, "it would be hard to see why you couldn't
put the numbers 2 and 3 together."
DirecTV and Dish are the second- and third-biggest pay-TV providers by subscribers, while Comcast Corp. and Time
Warner Cable Inc. are No. 1 and 4, respectively.
A Comcast-TWC merger would "send a seismic shift across our industry" that "puts pressure on everybody" in the
video and broadband businesses in an "unprecedented" way, Mr. Ergen said. "There is nothing that I can see that's
positive about it for anybody in the video or broadband or content business."
Mr. Ergen's comments came a day after DirecTV Chief Executive Mike White voiced his opposition to the cable deal.
Mr. White also said DirecTV "will continue to look at options for how we can strengthen our company for the long term."
DirecTV and Dish tried to merge more than a decade ago but abandoned that effort in the face of regulatory
opposition. In the past year or two, however, executives from both companies have indicated a continuing interest in the
merger idea, while acknowledging regulatory uncertainties.
Company executives have also noted that another obstacle facing a combination could be the divergent strategic
paths the two have taken in recent years. Unlike DirecTV, Dish is looking to enter the wireless business, for instance.
On Friday Mr. Ergen said the different strategies "don't necessarily make things impossible" and after the Comcast-TWC
deal, it "certainly makes us look at everything in a different light."
Dish's executive vice president of corporate development, Tom Cullen, told analysts that management was assessing
the impact of the deal and will be putting together "options, recommendations and impacts" to be shared with its board
of directors "shortly." Mr. Ergen said Dish hasn't yet decided whether to formally oppose the deal.
Mr. Ergen's comments came as Dish said its fourth-quarter profit jumped 38% as it added subscribers to both its
pay-TV and broadband services.
On the subject of wireless, Mr. Ergen made clear that Dish isn't interested in going up against SoftBank Corp. of
Japan, which bought control of Sprint Corp. last year. The Wall Street Journal has previously reported Sprint's interest
in an acquisition of T-Mobile.
"We're realistic to know we're not going to outbid SoftBank in any transaction," Mr. Ergen said.
Separately on Friday, Charter Communications Inc. CEO Tom Rutledge told analysts that Charter remains interested in
expanding through a merger "when that opportunity arises," his first public comments since Charter's bid for Time Warner
Cable was trumped by Comcast last week.
Mr. Rutledge's comments came as the fourth-largest cable operator by subscribers swung to a fourth-quarter profit
on higher revenue, boosted by its acquisition last year of Bresnan Broadband Holdings LLC.
Michael Calia contributed to this article.
Write to Shalini Ramachandran at email@example.com
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