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Dish Warns That Univision TV Blackout ‘Could Become Permanent’

Hispanic media company's channels have been dark on satellite, Sling TV since June 30

Dish Network says the removal of Univision Communications’ TV networks — from both its satellite and over-the-top Sling TV services — might be for good.

On June 30, after Dish and Univision failed to come to terms on a contract renewal, more than 60 Univision-owned stations and cable channels including UniMás and Galavision went dark on Dish’s pay-TV platforms.

“This removal could become permanent,” Dish said in a 10-Q regulatory filing Friday.

Dish said that stems from the fact that Univision’s programming is available through alternate means, namely via over-the-air antennas and directly from Univision over the internet via Univision Now, priced at $7.99 a month.

Dish’s comments on Univision came as the operator reported results for the second quarter of 2018. It shed 151,000 total pay-TV customers in the period, losing 192,000 satellite TV subs (to stand at 10.65 million total) and gaining 41,000 for Sling TV (2.34 million total). Its total TV base has shrunk 2.6% in the last 12 months — meaning the OTT side of the house is not making up for cord-cutting in the satellite biz.

For Q2, Dish beat Wall Street expectations on the top and bottom lines. Revenue was $3.46 billion, down 5%, and net income was $439 million (compared with net income of $40 million in the year-ago quarter, which included a $280 million fine for violating a federal telemarketing law).

Univision has accused Dish of rejecting multiple opportunities to resolve the standoff. In a July 30 statement, Univision said its execs visited Dish’s offices last week to try to resolve the dispute.

“Despite Univision’s good-faith and meaningful offer, Dish responded with an offer that was essentially the same as the one they previously offered back in June,” the company said. “We remain open and willing to negotiate with Dish at any time and ready to return to their offices this week should they choose to be constructive to the process. Our audience and our community deserve to be treated fairly by Dish and we will continue to fight on their behalf.”

On Monday, Dish said it will offer a $5 monthly credit to DishLatino and Sling Latino package subscribers, effective with billing cycle starting Aug. 1. In response, Univision said in a statement, “With this announced refund, Dish recognizes what its Hispanic customers already know to be true: without Univision networks and local stations, there is no ‘DishLatino’ and certainly no ‘Best of Spanish’ on Sling TV.” The media company claimed that its networks account for 60% of Spanish-language viewing on DishLatino.

It’s worth noting that Dish — a notoriously hardball negotiator in programming spats — has used brinkmanship rhetoric in past disputes.

In November 2014, amid a blackout of several Turner channels on the satellite TV service, Dish’s then-CEO Charlie Ergen said on an earnings call, “When we take something down, we’re prepared as a company to leave it down forever… Things like CNN are not quite the product that they used to be.” The two sides reached a deal later that month.

In its 10-Q filing, Dish included standard-sounding boilerplate about the potential impact of a permanent loss of Univision programming, including continuing subscriber losses. “There can be no assurance that the removal of these Univision channels will not have a material adverse effect on our business, results of operations and financial condition or otherwise disrupt our business,” Dish said in the filing.

The standoff with Dish comes at a tumultuous time for Univision. The company has seen an exodus of senior execs in the months since it scrapped its IPO in March, including former CEO Randy Falco, chief content officer Isaac Lee, programming boss Lourdes Diaz, and most recently chief revenue officer Tonia O’Connor.

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