CABL Forum

Street Eyes Latest Dispute with Turner, DISH

While the satellite TV business waits for what may happen next with the latest programmer/distributor skirmish, this one involving EchoStar and Turner networks controlled by Time Warner, Wall Street is taking notice of the dispute.

Any loss of Turner networks may impact EchoStar's second quarter, Oppenheimer and Co. analyst Tom Eagan said in a research note released Friday. The Viacom spat EchoStar endured early in the year led to a $1 discount for subscribers who purchased packages with Viacom networks, such as MTV and Nickelodeon, which in turn may impact the company's financial results for the three-month period, the analyst said.

"We expect the company's first quarter results will be negatively impacted by the shut off of the Viacom channels," Eagan said. "Specifically, EchoStar's granting the impacted customers a $1 credit will likely lower ARPU (average revenue per subscriber) and those irate subscribers - we estimate up to 10,000 - who left EchoStar should add to the normal churn."

Part of the reason for EchoStar's recent disputes with programmers may be to persuade Washington, D.C., regulators and lawmakers to allow satellite TV providers to offer digital distant network signals if they are not available via over-the-air broadcast, hinted the Oppenheimer and Co. analyst. "While it is difficult to conclude how that issue will be resolved, we think EchoStar's battles with programmers are not viewed favorably by Washington officials - Federal Communications Commission and Congress - facilitating passage of regulation, such as the current SHVIA (Satellite Home Viewer Improvement Act), which is decidedly anti-EchoStar."

The Turner networks that are part of the dispute reportedly include CNN, Headline News, Cartoon Network and Turner Classic Movies. TBS and TNT are excluded from the battle and are under a separate contract, according to sources.

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