EchoStar/Dish raises doubts about 'ability to continue as a going concern'

[Bruce]

CEO Of Dish Network Parent EchoStar Gauges Bankruptcy Risk, DirecTV Merger Prospects After Company Posts Spotty Q1 Results And Stock Falls

Shares in Dish Network parent EchoStar fell 11% after the company's lackluster first-quarter earnings report and anxiety about its finances.

deadline.com

from the article-

Asked directly by one about the company’s strategy if it “doesn’t or shouldn’t file for bankruptcy,” Akhavan said, “Our recipe is very simple, candidly. Can we push the maturities out … so that we have enough cash to operate the business? We’re very bullish about our prospects for operating the business if we have the capital to execute that. While we’re working on that financing, we aren’t sitting on our hands.”

I read that as begging the bond holders.

 

[telstar_1]

Other than live sports and news, there is really no need for linear TV anymore for much of America. We've become accustomed to an "on demand world" where anything we want to watch is available when and where we want it: from music to movies/tv. Linear television requires a user to set recordings (basically creating ones own "on demand") or watch it live. And other than live sports or news, NONE of the programs available on HGTV, Hallmark, MTV, Nickelodeon, etc. need to carried on a live, linear channel. I'm still waiting for the first one of those to drop their linear channel and only provide on demand content. I'd assume it'd be one that targets a younger demographic, so likely Nick or MTV.

They will do that when providers will no longer pay them enough.

Why is all of Live TV (except YTTV) losing subscribers.

I believe it is because of a pricing and less and less new content issues.

Which I do not really just blame Dish or any other provider for, I blame the content providers for jamming so many channels, many of which provide nothing but reruns, but increase the monthly bill because of so many extra per sub fees for each channel.

Or when they split up channels, like when Fox made FX into three (FXX, FX Movies), when that happened, the per sub fee for FX stayed the same, but then they were getting that fee for two more channels, from where the content was already on FX, also increased the rerun programming on those channels.

I do wish Providers had the foresight to understand what all these extra channels was going to customers and their monthly, but when it was happening, there was no other choice fot programming except OTA, so they chose to ignore, just like they did when cord cutting started.

So now we have today, the rerun programming is available free on services like Pluto, the most popular new content from Paid Live TV, plus the exclusive shows, on streaming services and cord cutting is getting worse because they now have competition in the streaming services.

Can Cable/Satellite save themselves, yes, but must start now, get rid of all those extra channels, lower the bill, like in the YTTV range, tell those who produce the programming that paid Live TV needs more new content, but not the low rated fake reality stuff.

Will it be painful, yes, but is a little pain now better then out of business in 2-3 years?

By the way, Charter/Spectrum kind of did this, dropped some of the extra Disney owned channels, but in the way you expect a cable company to handle that, price did not go down and actually went up in January.

Charter/Spectrum just had their biggest Quarterly lost ever reported.

Cable/sat "saving themselves" by dechanneling will not happen, particularly sat. Cable can continue with robust broadband as a backbone for streaming, but sat is just really in a bind. They can ax channels, but many of them are of such low per-sub cost that it wouldn't amount to anything significant, and if they cut into real cost-drivers like ESPN, their deflating base will collapse even faster. Perhaps some better way of targeting viewing like to cut sports and lower bills for those not wanting that would save some subs, but then those wanting the sports would have to see hikes and it'd be double trouble- reduced revenues from BOTH kinds of subs.

The term "death spiral" comes to mind. I guess they call it "doom loop" now.

 

[MitchDeerfield]

SlingTV has the worst interface of any streaming provider I have used.

It need a major overhaul.

The confusing way that Sling is marketed, with Blue and Orange packages that no one understands, is definitely part of the problem.

 

[navychop]

Why can’t Dish make a deal with someone to create and produce content that could be unique to Dish? “Rome” comes to mind.

 

[nelson61]

Why can’t Dish make a deal with someone to create and produce content that could be unique to Dish? “Rome” comes to mind.

As in burning

 

[nelson61]

SpaceX has the Echostar 25 launch contract. 2026.

EchoStar XXV. On March 20, 2023, we entered into a contract with Maxar Space LLC for the construction of EchoStar XXV, a DBS satellite that is capable of providing service to the continental United States (“CONUS”) and is intended to be used at the 110 degree orbital location. During the fourth quarter of 2023, we entered into an agreement with Space Exploration Technologies Corp (“SpaceX”) for launch services for this satellite, which is expected to be launched during 2026.

 

[nelson61]

The first quarter dirty details are available on the SEC EDGAR Web site

EDGAR Entity Landing Page

 

[Bruce]

The first quarter dirty details are available on the SEC EDGAR Web site

EDGAR Entity Landing Page

From there-

Through the MNSA and the NSA, we depend on T-Mobile and AT&T to provide network services to our Wireless subscribers.

That shows they are still not using all of that spectrum they have been hoarding/buying.

If they can figure out how to monetize it, investors could come calling to Dish, in basically 5 months, that big bond payment is due, every month they do not get their financial issues handled brings them closer to Chapter 11.

Also, I wonder what three consecutive quarters of unprofitably, significant revenue loss, all three services have major subscriber loss for the last few years looks to a investment group.

And I read the report, TV Service still makes money, a lot of it, but wireless is dragging the company down.

Once again, if the hoarding/buying of Spectrum did not happen, they would of bought out DirecTV by now, would be the #1 Provider, could of then put out great pressure and help control costs with the per sub fees.

Instead, because of the spectrum money pit, they are now number 5, a provider that has only been providing service for 7 years has past them, a company that has been doing so for 28 years.

 

[Bruce]

“We do not currently have necessary cash on hand, or projected future cash flows, to fund fourth quarter operations or the” debt maturing in November, Orban said. “We are in discussions with funding sources at all levels in our capital structure”.

Moffett stated EchoStar would struggle to find additional sources of funding and cannot sell the bulk of its wireless spectrum before the end of 2026.

He explained while Dish Network was an active bidder against rivals T-Mobile US, AT&T and Verizon in previous spectrum auctions, it mainly drove up prices as a fourth bidder.

With its rivals spending heavily on previous spectrum auctions, Moffett stated they may not be financially positioned to buy Dish Network’s spectrum, particularly AT&T and Verizon.

“To state the obvious, none are in the position to spend aggressively on new spectrum”.

He also noted spectrum transactions take years to clear regulatory hurdles and even longer if they are part of a bankruptcy proceeding.

Analyst sets timeframe for possible Dish bankruptcy

MoffettNathanson senior MD Craig Moffett predicted Dish Network could face bankruptcy over the coming four to six months.

www.mobileworldlive.com

 

[Bruce]

Also giving up on postpaid cell phones for now-

Officials from EchoStar's Dish Network acknowledged Wednesday that the company's first foray into the postpaid market for 5G services wasn't ideal. And they said the company is preparing to try again later this year.

"Our initial approach to the market was rushed," said Hamid Akhavan, president and CEO of EchoStar.

Akhavan said Dish will re-enter the US postpaid market for wireless services sometime in the second half of 2024.

EchoStar's Dish to try again in postpaid 5G later this year

Dish first launched its Boost Infinite postpaid service at the end of 2022. But 'our initial approach to the market was rushed,' said the company's new CEO, Hamid Akhavan.

www.lightreading.com

 

[Juan]

Why can’t Dish make a deal with someone to create and produce content that could be unique to Dish? “Rome” comes to mind.

$$$$$$$$$$$$$$$

 

[Bruce]

Why can’t Dish make a deal with someone to create and produce content that could be unique to Dish? “Rome” comes to mind.

DirecTV tried that, did not work.

Dish in 5 months, unless they get a loan ( with awful terms) or investor(s), who also will be wanting some kind of guarantee or collateral, will not have enough money to continue services.

So they definitely do not have enough to finance exclusive TV shows.

If there is no hope for someone to bail them out, they need to declare soon, preserve as much cash they have left, so they will be able to come out of Chapter 11 with some capital.

 

[Juan]

DirecTV tried that, did not work.

Dish in 5 months, unless they get a loan ( with awful terms) or investor(s), who also will be wanting some kind of guarantee or collateral, will not have enough money to continue services.

So they definitely do not have enough to finance exclusive TV shows.

If there is no hope for someone to bail them out, they need to declare soon, preserve as much cash they have left, so they will be able to come out of Chapter 11 with some capital.

Dish would do something like a w4 hour Charlie chat channel or bingo tv

 

[Bruce]

Dish would do something like a w4 hour Charlie chat channel or bingo tv

I do not believe that Charlie has showed up to the last 2 earnings call, where they answer question after the report.

 

[Yespage]

Our cash and cash equivalents and marketable investment securities totaled $766 million as of March 31, 2024 (“Cash on Hand”). As reflected in the condensed consolidated financial statements as of March 31, 2024, we have $1.983 billion of debt maturing in November 2024, and we are forecasting negative cash flows for the remainder of the calendar year 2024.

Because we do not currently have committed financing to fund our operations for at least twelve months from the issuance of these condensed consolidated financial statements, substantial doubt exists about our ability to continue as a going concern. We do not currently have the necessary Cash on Hand and/or projected future cash flows to fund fourth quarter operations or the November 2024 debt maturity. To address our capital needs, we are in active discussions with funding sources to raise additional capital. We cannot provide assurances that we will be successful in obtaining such new financing necessary for us to have sufficient liquidity. Further, if we are not successful in these endeavors, then capital expenditures to meet future FCC build-out requirements and wireless customer growth initiatives will be adversely affected.

What is "That doesn't sound good?"

Regarding 5G however:

The single remaining 5G commitment, that at least 70% of the U.S. population has access to average download speeds equal to 35 Mbps, was achieved in March 2024 using the drive test methodology previously agreed upon by us and the FCC and overseen by an independent monitor. We now have the largest commercial deployment of 5G VoNR in the world reaching approximately 200 million Americans and 5G broadband service reaching approximately 250 million Americans.

Well, that sounds better. But if they don't start making huge in-roads to monetizing that, it won't matter. I think one thing Dish needs to do is hire a competent advertiser. The one thing I wonder, they have proven the speed, but do they have an issue with volume?

 

[Bruce]

What is "That doesn't sound good?"

Regarding 5G however:

Well, that sounds better. But if they don't start making huge in-roads to monetizing that, it won't matter. I think one thing Dish needs to do is hire a competent advertiser. The one thing I wonder, they have proven the speed, but do they have an issue with volume?

I keep wondering what happened to all those investors they were talking to, Dish made it sound like it was a done deal.

Not one word about it came up about them during the earnings call, except the statement of ‘if we do not have some loans or investment, we cannot fund the company past the third quarter’.

Again, if it is not going to happen, declare now, save that $766 Million so to help them once they come out of a possible Chapter 11.

 

[navychop]

Lotta factors in when to file, what to file, if allowed to file.

Been there, done that, got the T-Shirt. And BURNED IT!

 

[MikeD-C05]

Wonder if they tried to work some kind of deal with Amazon or Google? Or put their bandwidth up as collateral for another loan to get better payments or interest rates? There has to be someone that would step in if they could get a percentage of ownership of the stock. But Charlie doesn't do partnerships too well. In the past the WebTV /Dishplayer debacle with Microsoft and DISH at war comes to mind. This is why it would help to have some kind of partnerships or allies you could fall back on and a history of working well with others. So Reorganization / Bankruptcy will be the way they settle it I guess.

 

[MikeD-C05]

I just don't want to see people taking care of their personal hygiene needs on TV while I am eating, thank you very much. Like the commercial for Lumi body deodorant that was playing non stop for a while back. For "Pitts, underboob, private parts" and the male version Mando so you can "smell better naked everywhere. " That women pitch person made me hit mute every time that commercials came on if we were watching live TV.

 

[Bruce]

Wonder if they tried to work some kind of deal with Amazon or Google?

Why would they want to do that?

Not a good investment since Dish/Echostar reported an 8.5% revenue decline in the first quarter of 2024

Or put their bandwidth up as collateral for another loan to get better payments or interest rates?

Bond Holders already have first dibs on the spectrum, unless there is a bankruptcy.

There has to be someone that would step in if they could get a percentage of ownership of the stock.

Based on the losses of the last three unprofitable quarters, it is a bad investment, especially since they cannot sell the spectrum until 2026.

Also, no guarantee that would be profitable.

But Charlie doesn't do partnerships too well.

The problem is, Dish’s most valuable commodity is the spectrum, but it is already spoken for by the bond holders, remember Dish tried to change the terms of the bonds, holders fought back, Dish backed off because they knew they would lose that battle.

In the past the WebTV /Dishplayer debacle with Microsoft and DISH at war comes to mind. This is why it would help to have some kind of partnerships or allies you could fall back on and a history of working well with others.

With the history Charlie has, that ship has sailed.

The recent stunt he tried to do with the bonds did not help either.

So Reorganization / Bankruptcy will be the way they settle it I guess.

Maybe someone will invest, I have heard no such rumors, but I do not work on the financial side of things, so possible I guess.