Dish CEO Sees Path to Carriage Deal With Viacom

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Dish Network Corp. Chief Executive Charlie Ergen said he sees a potential path to reaching a new carriage deal with Viacom Inc. but is prepared to move on if the two companies can't come to terms on price.  Dish's contract to carry Viacom's channels is set to expire at 11:59 p.m. ET Wednesday, meaning channels including Nickelodeon, Comedy Central and MTV could go off the air for Dish's 13.9 million customers if no deal is struck. Viacom this week said discussions had broken down and accused Dish of making unreasonable demands.  "Last week I didn't see a path with Viacom," Mr. Ergen, who is also chairman, said on Dish's earnings call on Wednesday. But the tone was more productive through the weekend, he said. "There actually probably is a path to continue carriage. But it's not done yet. And obviously the devil's in the details."  Mr. Ergen said he would like to reach a deal with Viacom, if possible. But, "we're prepared to move on as Suddenlink and others have done without the content," he said.  Viacom on Tuesday began running a crawl on its channels for Dish customers informing them of the contentious state of negotiations.  "Consumers have spoken loudly and clearly," Viacom said in a statement Wednesday. "Over the past 24 hours, hundreds of thousands of concerned subscribers have reached out to implore Dish to negotiate reasonable terms with Viacom for continued carriage of our networks. Based on year-to-date Nielsen data, our networks represent nearly one fifth of cable viewership on Dish, which gives Dish enormous incentive to renew our agreement. As a long-standing partner, we are hopeful that we can work together to reach a deal."  The discussions have been a hot topic for Wall Street investors amid fears of escalating cord-cutting and because the monthly fees from pay-TV providers are a key source of revenue for media companies. Suddenlink Communications was among the cable operators that dropped Viacom's networks in 2014.  Dish is known for being a fierce negotiator in carriage negotiations, leading to multiple blackouts over the years. The latest battle comes as Dish's subscriber base declines.  On Wednesday, Dish said it added roughly 657,000 paid subscribers during the period ended March 31, compared with about 723,000 in the year-ago quarter. Net subscribers declined 23,000 in the first quarter, compared with a 35,000 gain last year.  The company closed the first quarter with roughly 13.9 million pay-TV subscribers, compared with 14 million at the end of the 2015 first quarter. Dish includes subscriptions to its Sling TV streaming service in its total pay-TV metrics.  The streaming service was launched last year as a skinny bundle of select channels, providing a cheaper option for consumers who want some live TV but who don't have traditional pay-TV subscriptions.  The original basic version of Sling TV includes channels from Walt Disney Co. such as ESPN, but only allows one stream at a time. Last week, Dish unveiled a new version of Sling TV that includes channels from 21st Century Fox and allows three simultaneous streams on different devices.  On Wednesday, Dish executives said the company is talking to Disney about potentially joining the multi-stream option, but the companies haven't yet come to an agreement. That would also drive up the price, executives said.  Sling TV CEO Roger Lynch said the strategy will remain to have a single-stream service and a multi-stream service to target different segments of the market.  Dish was able to post surprise profit growth in the first quarter, helped by sharply lower interest expenses, even as revenue grew less than expected.  Overall, the company reported profit of $389.3 million, or 84 cents a share, up from $351.5 million, or 76 cents, a year ago. Revenue increased to $3.79 billion from $3.72 billion in the prior-year period.  Analysts polled by Thomson Reuters had anticipated 62 cents a share on $3.8 billion in revenue.  Dish added 5,000 net broadband subscribers in the first quarter, bringing its total broadband base to about 628,000.  The company reported its interest expense nearly evaporated in the latest quarter, to $667,000 from $156.3 million in the year-earlier quarter. Meanwhile, operating expenses edged down 0.4%.  The company's stock, which is down 32% from a year ago, was flat at $47.40 in late afternoon trading.

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