At least one major telecom analyst believes that Dish Network is in big trouble -- trouble that even selling the company's hoarded spectrum troves won't fix. MoffettNathanson issued a research note this week insisting that "Dish's core business is now almost certainly worth less than its accumulated debt," and neither Dish's spectrum holdings -- or its Sling TV streaming video efforts -- will be able to help it. Dish has been losing TV subscribers at an alarming rate, in large part courtesy of a growing number of retransmission disputes at the company, which result in blacked out content and even angrier subscribers.
On one hand, Dish should be applauded for actually evolving, and unveiling Sling TV. Many incumbent cable providers have been too timid on this front; worried that offering a cheaper, more innovative streaming TV platform would cannibalize existing legacy pay TV subscribers.
But "with industry-wide gross margins in the vMVPD business at or below zero, it is reasonable to simply ignore Dish's Sling TV subscriptions as economically irrelevant," claims the Wall Street firm.
Dish's name has been tossed around as a possible M&A partner, most frequently as a possible suitor or partner for Sprint or T-Mobile. But Dish boss Charlie Ergen has an industry reputation for being immeasurably and unnecessarily difficult in negotiations, resulting in little traction on that front. Dish's ongoing claims that it intends to build a wireless network also seem perpetually in limbo.
Dish has been hoarding spectrum for the better part of several years, though MoffettNathanson insists there's few suitors at the moment eager to pay the kind of money Dish is looking for.
"Commodity theory requires that there are large numbers of independent actors on the buy side," states the report. "In wireless, there are but four potential buyers. As it happens, none currently have the economic firepower to buy Dish Network's spectrum even if they wanted to."
In short satellite video delivery is becoming unsexy in the broadband era (see AT&T's indications it may scrap DirecTV and go fully OTT), and Sling TV won't provide healthy enough profit margins to keep the company afloat as it slowly but steadily loses traditional TV viewers. And with no broadband revenues to lean on like giant competitors AT&T, Verizon and Comcast, Dish may be left with few options.
