Dish Network Spin Off Info

[Scott Greczkowski]

While this is old news, this is the first time I have seen in writing Echostar talking about spinning of Dish Network.

This is from the Retailer Facts Blast which was sent to retailers today.

· EchoStar is Considering a Spin-Off of our Technology and Infrastructure Assets from DISH Network’s U.S. Consumer Business – Under the proposed plan, EchoStar’s U.S. consumer pay-TV business would continue to operate as DISH Network. By doing this, we can extend the reach of our award-winning receivers and other product technology. We believe separation of our consumer-based and wholesale businesses could unlock additional value. Each company would be able to separately pursue the strategies that best suit its respective long-term interests.
o The spin-off assets would include EchoStar’s:
– Award-winning set-top box design and manufacturing business. EchoStar is the world’s leading developer of DVRs and shipped over 9 million units in 2006 to DISH Network and International customers.
– International operations.
– Assets used to provide fixed-satellite services to third parties, together with satellites, uplink centers and spectrum licenses not considered core to DISH Network’s subscriber business.

 

[Cyclone]

This leaves the door open for charlie to sell off Dish Network to at&t, keep the E* hardware division for himself, and then launch his own new MPEG4 only network using the same hardware he is familiar with.

Not only does he get a nice influx of Cash from at&t, but he doesn't have the headache of getting those tens of millions of MPEG2 STBs swapped out.

Out of the box he will have more capacity with lower costs (only has to worry about two slots), likely cheaper for FCC licenses too. But is there a market for a 3rd DBS player?

 

[RandallA]

"This leaves the door open for charlie to sell off Dish Network to at&t, keep the E* hardware division for himself, and then launch his own new MPEG4 only network using the same hardware he is familiar with."

Sounds like that's the game plan.

 

[RockinHARD26]

How about any new HD content?

 

[ScoBuck]

Considering that AT&T is no fool - having bought and sold many businesses in its history - you have to believe that there will be a non-compete clause in that contract - which is pretty standard operating procedure.

 

[DishInSD]

Does this mean we could potentially see the equivalent of a 722 that works with other providers? That would be great if true.

 

[RockinHARD26]

I'm going to switch, the customer always gets screwed when companies do things like this!

 

[Poke]

Hmm well maybe on the next Charlie Chat or something someone will come out and clear things up. Either way someone with Dish needs to get the facts out on what for sure Dish plans on doing.

 

[KE4EST]

I agree Poke.

 

[Poke]

Yeah well Charlie starts another Sat Service with MPEG4 I will for sure go that route. But right now no one knows for sure what is going to happen but him so it's the wait and see game for now.

 

[mlb]

As ScoBuck said, no way Charlie is allowed to do it for a number of years after AT&T purchases Dish.

 

[Poke]

As ScoBuck said, no way Charlie is allowed to do it for a number of years after AT&T purchases Dish.

I would not say that due to if he has the hardware like he should have with the receivers. Then it would just come down to how long it takes for them to get their new MPEG4 Sats up and running. Which to me just having a one Dish solution with two LNB's hitting two Sats that have all SD and HD in MPEG4 that would give them plenty of room to add future HD without needing anymore Sats for many years. But yet again this is just guessing at what could happen but we will not know for sure until there is some kind of ""Official Announcement"". Let all hope that we will here something soon maybe next reatailer chat or something due to it's always nice to know what the future will hold.

 

[Bradtothebone]

Can you imagine how long it would take Charlie to negotiate all the carriage agreements for a new sat service (especially a "small" one)? It could take years before the new service was "fully channelled." Sounds like a quantum leap of faith on Charlie's part, if that's what he's thinking.

Brad

 

[harshness]

Hmm well maybe on the next Charlie Chat or something someone will come out and clear things up. Either way someone with Dish needs to get the facts out on what for sure Dish plans on doing.

What Echostar does or doesn't do is going to depend largely on decisions rendered by the gummint. If they won't let the AT&T deal pass through tax free, they may not do it.

 

[Poke]

Well for now its just a wait see deal.

 

[Jeffro34tx]

No doubt about it.... there would most definately be a non-compete clause. As stated before, this is standard with just about any type of business these days. Why would ATT not have this? One of the pioneers of DBS and you would let him go and start another business that would compete with the one you just bought from him for a TON of money.

Don't count on Charlie starting a new service. For that matter... don't count on him working for any other direct competitor. I would not rule out him staying on with DISH-ATT perhaps.. that would be possible. But more likely he would stay and focus on Echostar.

 

[navychop]

No, no new startup DBS for Charlie. But from his comments, I see some sort of new MPEG-4 only service starting up. Maybe as a new tier of service from Dish.

 

[Bulldog]

Moratorium for E* for an estimated six months to two years for Tax-Free Status?

An interesting news story in the Wall Street Journal stated in part that should EchoStar go with the breakup, it could have to go into a moratorium for an estimated six months to two years to keep the deal’s Tax-Free Status.

 

[navychop]

What do you mean by "moratorium?"

 

[Bulldog]

Moratorium

What do you mean by "moratorium?"

Temporary suspension of payment.