Contract negotiations between Dish Network and the Walt Disney Co. look to be as cantankerous as the dustup last month between Time Warner Cable and CBS.
Things are not going smoothly for the two entertainment heavyweights with their contract set to expire Sept. 30.
The talks stalled last week, according to the financial website seekingalpha.com, and Dish co-founder and Chairman Charles W. Ergen was taking a hard line as early as last month.
This does not bode well for Haroon Temueri, owner of Beef O’Bradys, a new sports bar in Santa Clarita and apparently a hot spot for fans of the Pac-12 Conference. He had Dish Network installed and, when it comes to extras, only pays for the Pac-12 Network.
Temueri haD a big party booked for 10 a.m. Saturday, and now he’s worried about a content black out like the monthlong outage during Time Warner’s talks with ABC.
“They (the customers) requested the Pac-12 Network, and Dish was the only one carrying it, so I had to go with it. If there is a blackout, I’d probably lose between 60 to 70 percent of my business,” he said.
Temeuri is trying to find out how the talks are going any way he can, but it’s been tough.
“I am trying to pick up dribs and drabs from various sources, but we don’t have any update today (Friday), he said. “It looks like there might be a blackout.” This does not surprise analysts who track the industry and they expect the negotiations to take a similar tone to those between Time Warner and CBS and possibly feature a content blackout. Time Warner customers in Los Angeles, Dallas and New York had to endure a monthlong content interruption before a new deal was reached.
If that happens, Dish customers would be without ESPN’s huge menu of sports offerings and the Pac-12 network while college and professional football are kicking into high gear and the baseball playoffs are close at hand.
Analyst David Martin, at Los Angeles-based B. Riley & Co., anticipates spirited meetings.
“Anytime you have (Dish) involved, you know its going to be contentious. (Dish) is a one-trick pony. They provide distribution services to their customers but they don’t have anything else. There is no triple play. There is no Internet service. There is no phone service,” he said.
Industry analyst Laura Martin at New York-based Needham & Co. expects some Dish customers may see Disney content channels go dark, at least for a while.
“Given the Time Warner/CBS experience, consumers should not be surprised by a blackout,” Martin said. “Charlie is one of the toughest negotiators in the business, and Disney has some of the best content. But I think it will be a fair fight.”
The talks are focused on how much Dish is willing to pay for Disney’s programming and whether it can put programs on mobile phones. The contract dates back to 2005. Dish has 14 million subscribers nationwide.
Burbank-based Disney is a huge content provider, owning both the Disney/ABC Television Group and the sports juggernaut ESPN. The company also owns eight ABC stations located in Los Angeles, New York, Philadelphia, San Francisco, Houston, Chicago, Fresno and Raleigh-Durham, N.C. Since September 2010 Disney has negotiated seven contracts without facing a content blackout period.
Both companies commented about the negotiations via email.
“Disney has been a good partner with Dish for a long time. We have been talking on a regular basis. Dish works around the clock and has reached many agreements with big broadcasters and we are optimistic that we will get a deal done to continue to carry Disney’s programming,” said a Dish email.
“Disney’s suite of networks and services are hugely popular with viewers and ESPN delivers the most value of any programming network in America. We have a long history of completing agreements with distributors reflecting that value and we continue to have constructive conversations with Dish,” said Disney.
But a small window opened in early August when Ergen was asked about the contract talks during a conference call about Dish’s earnings.
“Obviously, we’ll work first and foremost to find a deal with Disney that makes sense for our customers. If we get that deal, we’ll do it. If we don’t get that deal, we’ll part ways. Simple as that,” Ergen said, according to a transcript posted on the website seekingalpha.com.
The talks between Time Warner and CBS soured prior to the start of NFL preseason games.
“Somebody sometime may decide that sports isn’t something they have to have,” Ergen said. “And … neither side has to have the other side, right? Disney’s not going to go out of business without the Dish Network — and vice versa.”
