Dish Network CEO: Dividends Are 'Always On The Table For Us'
By Roger Cheng, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Dish Network Corp. (DISH) Chief Executive Charles Ergen
said Monday that dividends are "always on the table" for the satellite-TV
provider.
The comments come on the heels of Dish's $2-per-share dividend payout, which
took Wall Street by surprise because the company tends to avoid returning cash
to shareholders.
Dish did attempt to use the cash to make an acquisition or reinvest in the
business, but couldn't find a good use for the funds, Ergen told analysts
Monday. He was reluctant to spend on the business with the overhang of TiVo Inc.
(TIVO) litigation still lingering.
On TiVo, Ergen said that, regardless of how the pending intellectual-property
lawsuit fares, he believes the two will have a relationship.
"At some point, the path will be clear," he said.
The company posted a 10-fold gain in new subscriber additions in the third
quarter from the second quarter, a return to growth that was driven by
promotions and marketing. The result has been a hit on revenue and margins
because of the lower prices. But the discounts are mostly upfront, Ergen said,
and shouldn't be taken as a long-term reduction in prices. He declined to
provide a more long-term focus, saying it was hard to tell.
There are opportunities to improve the average revenue per user, but online
content and the economy create headwinds, he said. The company's offers are
lower than those of its competitors, so there is room to increase prices, he
added.
Dish's turnover rate also fell, which Ergen attributed to improvement in
services. The company has done a better job improving its customer service. On
operating costs, he said he believes they will continue to go down, but he
doesn't see them at optimal levels until next year.
The rumored deal between Comcast Corp. (CMCSK, CMCSA) and General Electric Co.
(GE) on NBC Universal is a concern for Dish, Ergen said. Dish pays Comcast for
programming, and he noted that costs for Comcast'sPhiladelphia sports content "
always smelled a little bit."
Ergen argued that the loss of AT&T Inc. (T) as a reseller partner has actually
benefited Dish, since it could focus its resources on regional phone companies
that are more interested in long-term partnerships. He noted that it was tough
selling a TV product to an AT&T customer knowing that the telecom giant would
likely want to sell its own U-Verse service.
Ergen declined to talk about whether AT&T or Verizon Communications Inc. (VZ)
would be interested in acquiring Dish or DirecTV Group Inc. (DTV), the only
other satellite-TV company.
Ergen also backed away from the company's wireless ambitions, saying that it
was one of three uses for its wireless spectrum. The use depends on the
direction of the Federal Communications Commission, he said, adding that he
doesn't see a large capital commitment in the near term.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com
(END) Dow Jones Newswires
11-09-091320ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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