DISH Network Corp.
) - the second largest satellite TV operator in the U.S. - has
reached a long-term fee agreement with the media firm
Gannett Co. Inc.
). A failed agreement between the two could have denied 2 million
dish customers from getting access to Gannett-owned stations in 19
cities including Atlanta, Denver and Minneapolis among
The Mclean Virginia-based Gannett expected a 300% rate hike to
carry the latter's 22 channels, which are affiliated with NBC
universal, FOX Networks, ABC and
The two also got engaged in a legal dispute regarding Dish's
Auto Hop technology, which allows the customers to watch recorded
TV shows without commercial advertisements. Gannett has earlier
argued that this has led to possible loss in advertisement revenue
for them. Nevertheless, the new deal will allow the Dish customers
to view Gannett-owned channels apart from using the commercial
ad-skipping service simultaneously. The financial terms of the deal
were not disclosed by either of the companies.
In a similar deal,
AMC Networks Inc.
) had asked for a huge hike of 300% on its telecast fees from its
current rate of 25 cents per channel, which forced Dish to dump AMC
Network from its program list. For quite some time now Dish has
been involved in a legal battle with AMC Networks for unlawfully
removing the latter's VOOM HD channels from the program list. If
Dish looses the legal tussle it might face a hefty charge of $2.4
billion which might impact its cash position.
We believe this latest agreement will bring some respite for
Dish as another failed agreement would mean loss of another major
network partner from its stable. The new agreement would increase
its affiliate fess and thus could impact its bottom line, if the
company fails to pass on the rate hike to the customers. On the
contrary, if the customers have to bear higher fees, it could lead
to potential customer loss for Dish.
We are maintaining our long-term Neutral recommendation on Dish
Network Corp. The company also retains a Zacks #3 Rank, implying a
short-term Hold rating.
AMC NETWORKS- A (AMCX): Free Stock Analysis
CBS CORP (CBS): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis
GANNETT INC (GCI): Free Stock Analysis Report
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