Entering the second month of a blackout that has kept 42 Tribune-owned network affiliates in 33 markets off Dish Network (NASDAQ: DISH), Charlie Ergen, chairman and CEO of the satellite TV service, said his company is "tens of millions of dollars apart" with the broadcaster, and didn't sound hopeful about one of the largest ever retrans-related blackouts ending soon.
"It's a disagreement on pricing," Ergen said to investors during today's second-quarter earnings call. "We do hundreds of retrans deals. We know where the marketplace is, and we think they're out of line in terms of where they want to go."
Dish is facing two simultaneous impasses, with the NFL Network also off the satellite service amid a carriage dispute. Ergen said that negotiation is much closer to fruition, with the two sides haggling over more "positive, bigger picture issues."
But the Tribune impasse, he said, is "purely about dollars and cents."
Ergen admitted that the impasse had some impact on Dish's terrible subscriber numbers in the second quarter, with the satellite operator losing 281,000 net pay-TV subscribers — probably much more for its core satellite service, if metrics for IP service Sling TV didn't mask the equation.
Ergen called Tribune a "tweener" in the broadcast world — a company not tied to other major cable assets. He used NBC's corporate relationship with the highly rated USA Network as an example.
Tribune, he added, thinks of WGN as an equivalent asset. "They want to make that into a popular channel, and they've invested a lot of money to do that," Ergen said. "But it's not a popular channel to Dish customers. When you put those things together, you end up with a wide gap in terms of where both companies see the value."
Asked about the FCC's decision not to reform rules governing retrans negotiations, Ergen restated Dish's support for "baseball-style" arbitration.
"There should be a mechanism to resolve disputes, and we've been very vocal that baseball arbitration is the way to do it," he said. "Both sides pick a number, and the arbitrator chooses one of them. It's a stimulus to make a deal in the first place, and the consumer never loses their channel."
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