Analysts: Dish pursuing foolish strategy

Satcaster's stock drops as Streeters say its AMC policy is unwise

Shares of Dish plunged Wednesday as several Wall Streeters warned of a big black eye if the company doesn’t settle with AMC Networks ahead of a jury trial set for September.

Dish stock plunged 3.42% to $26.80, while AMC popped 2.16% to $40.73.

Litigation over an old HD service called Voom is “imminent” and “no longer merely a boilerplate entry buried in SEC filings,” said Bernstein Research analyst Craig Moffett.

The lawsuit is separate from a recent battle over Dish’s carriage of AMC networks, including AMC, IFC, Sundance Channel and WeTV. AMC insists that Dish refused to renew its contract without any negotiation of rates and pulled the channels at the end of June in order to gain leverage in the looming legal battle.

“We believe Dish is making a strategic mistake, risking billions to save $70 million per year in AMC license fees vs. settling their lawsuit and agreeing to a new long-term distribution deal,” said BTIG Research’s Richard Greenfield.

AMC, which was part of Cablevision when the Voom dispute erupted, is asking for $2.5 billion in damages.

Initial findings haven’t gone well for Dish. A judge ruled this spring that the company had destroyed evidence in the case.

“Cablevision and AMC enter the trial with a huge head start,” Moffett said. “In essence, the jury is to begin the trial with the assumption that Dish’s destroyed records that would have supported Cablevision’s claims. The odds would therefore appear to be heavily in Cablevision’s/AMC’s favor.”

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More TV News from Variety