Thursday, June 20, 2024
HomeBusinessDish's Charlie Ergen flew to Dubai to fundraise for TV giant

Dish’s Charlie Ergen flew to Dubai to fundraise for TV giant


Charlie Ergen quietly flew to Dubai earlier this month to woo potential investors for his struggling satellite TV giant Dish, On The Money has learned. 

The mercurial billionaire’s fundraising attempt came just a week before Ergen admitted on Dish’s May 3 earnings call that “the debt market is essentially closed.” 

Dish has seen its bonds trade for as little as 30 cents on the dollar as it faces $14.7 billion worth of distressed debt.

Dish has committed to build out a 5G wireless network that will serve 70% of the US by summer of 2023.

Dish has invested in 5G equipment over the last two years and met a 20% threshold last summer. 

Little wireless traffic has actually been transmitted over Dish’s 5G network.

Instead, most of Dish’s 8 million mobile customers are using the networks of T-Mobile and AT&T.

If Ergen doesn’t meet the buildout requirements, the Federal Communications Commission could force him to relinquish the 5G spectrum he has spent billions of dollars amassing in a series of auctions by the US government.

The problem for Dish is the company must spend billions to build out the 5G network at the same time it is hemorrhaging customers on cable.  


Dish has seen its bonds trade for as little as 30 cents on the dollar as it faces $14.7 billion worth of distressed debt.
Getty Images/iStockphoto

“They need a white knight to save them from their financial situation,” one source to the matter told On The Money. “Otherwise they’ve got to be considering all options — including bankruptcy.” 

While Ergen is aiming to meet the June deadline that will cover 70% of the US, after that the company will likely have to figure out some sort of backup plan — one that will likely involve negotiating with the FCC.

“We believe the most likely path forward for Dish near term is to negotiate an extension on its 2025 FCC coverage requirement after meeting its June 2023 deadline,” New Street Research policy analyst Blair Levin said in a recent note. “A 1 – 2 year extension would enable Dish to conserve or at least delay 2 to 3 billion of capital spending that would give it more runway to grow its consumer and enterprise subscriber base.” 

The likely negotiations square with chatter about where Ergen has been spotted over the last few months: inside the FCC building in Washington, according to insiders.

Dish did not respond to a request for comment.

Ergen has previously said the company is well-positioned to shift to a 5G wireless network. 

“We understand satellites really well. We understand video really well and now we understand the future of telco within the same sister company.”

But the change may not come soon enough.

News of Dish’s efforts comes after Dish’s dismal quarterly report in which the company lost nearly half a million subscribers and saw revenue dip to $3.96 billion from $4.33 billion during the same quarter last year.

“With DISH needing additional capital and debt maturities next year, we need to see a major step change in the level of cash burn to get comfortable with the wireless side of the business,” CreditSights senior analyst Davis Herbert wrote following the earnings call.

A report from S&P Global Ratings stated the financial position “may be unsustainable long term.”



This story originally appeared on NYPost

RELATED ARTICLES
- Advertisment -

Most Popular

Recent Comments