Dish Networks chairman Charlie Ergen wanted AMC but not its three sister networks and said Mark Cuban is more fun to do business with in any case.
“I think AMC as a standalone could make more sense but that wasn’t offered to us,” he said on an earnings call about the battle that took AMC, WeTV, IFC and Sundance Channel off Dish in June, replaced by Cuban’s HDNet.
AMC insists the move was a ploy by Dish for leverage ahead of a September trial in which AMC is seeking $2.5 billion in damages for breach of contract. Ergen said Dish is confident heading to court and that the carriage tiff was tied only to price. Both sides will suffer, he said. Dish will lose subscribers but also boost margins and save cash.
He said a Saturday night movie on AMC consistently outrated the net’s buzzed-about originals like “The Walking Dead” and “Mad Men” with Dish subs, many of whom are in rural areas. “Our customers live on farms and ranches. They have no idea of watching zombies walking around New York City saying, ‘I want my AMC.'”
Personal relationships seemed to factor in as well. “There are two ways to do business; a contractual relationship where you go out for dinner and they bring the contract in a briefcase, and whenever you say something they take out the contract. And the other way you can do business is what I call the Godfather approach — you do me a favor this time and I’ll help you next time. We have that business relationship with Mark Cuban,” Ergen said.
“It’s a lot more fun doing business with people you like doing business with who you can talk to about building your business.”
Dish’s quarterly earnings took a big hit on higher programming and marketing costs and a $43 million dip from losing an orbital slot.
Net income fell 33% to $226 million. Revenue was about flat at $3.57 billion.
Dish said a major campaign for its new Hopper DVR helped boost gross subscriber additions by 16.3%. Net subscribers fell by about 10,000. Dish ended the quarter with just over 14 million subs and an improved churn rate year on year.
Ergen and CEO Joe Clayton said the launch of the controversial Hopper in May improved subscriber quality by adding more DVR and broadband-connected customers. The device’s AutoHop function lets consumers skip ads on network TV more easily and has provoked a full-out battle with broadcasters that exploded this summer as they took Dish to court.
“The reaction (to AutoHop) was swift. Immediate praise from the buying public and hell and damnation from the broadcasters,” Clayton said.
“Companies can either fight change or embrace change. So far they are fighting change…It never ceases to amaze me, but I’m not running those companies,” Ergen said.