It’s been nearly 6-weeks since DISH blacked-out Tribune
Broadcasting’s WGN America network and its 42 owned or operated stations to its
5-million subscribers in 33 markets because of the inability of the two parties
to agree to new pricing terms for retransmission.
First move was by Tribune which launched a media blitz (with
website) “informing” subscribers of the impasse and suggesting they take action,
such as switching to another satellite/cable provider.
DISH countered in two ways. On June 16th, it requested that
Tribune agree to binding baseball-style arbitration to resolve the
dispute. A few days later, on June 20th,
it filed a lawsuit against Tribune in the U.S. District Court in Colorado seeking monetary damages
associated with increased expenditures, drop in revenue, and loss in goodwill
and reputation. https://consumermediallc.files.wordpress.com/2016/06/1-main.pdf
Tribune moved next by offering to extend the terms of the
old contract to August 31st while requesting the FCC to monitor “good
faith” negotiations. It moved again,
this time on July 20th, with an offer to extend the termination date
to September 15th, with no true-up or retroactive payments required
as long as access was restored immediately.
On an investor call on July 22nd, however, Charles
Ergen, DISH CEO, stated that the satellite provider was “prepared to live
without Tribune and WGN America”. What about its dispute with the NFL Network
too? With 281,000 (2%) lost subscribers in
the second quarter and football season fast approaching, what makes a strategic
negotiating bluff turn into a huge mistake for the firm?
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