Dish pins its hope on FCC in LIN retrans dispute


LIN Media announced that its contract with Dish Network is about to expire and said that it did not think Dish was going to offer a fair price for carriage of its broadcast stations. Dish responded that LIN will be the one pulling the stations, and expressed its approval of the FCC proceeding on retransmission consent. At least one financial analyst thinks Dish may be playing off the FCC meeting.

The dispute involves carriage of stations in 17 markets. The current contract expires at midnight 3/4/11.

LIN President/CEO Vincent Sadusky stated, “Our highly-rated television stations are important assets to our local   communities and it is unfortunate that DISH does not recognize their fair market value.”

Dish said, “LIN Media, a corporate media conglomerate, is threatening to block DISH Network customers from watching its local channels in 17 markets across the country.  LIN Media is demanding more than a 140 percent rate hike and other burdensome contract terms that ultimately will result in higher prices for consumers. We are pleased the FCC is meeting this week to seek changes to the outdated retransmission consent process. In the meantime, Dish Network is diligently negotiating with LIN Media, and we’re hopeful we can reach a fair agreement.”

At least one group of informed observers think Dish is taking the opportunity to play off the FCC agenda – that would be the analysts at Wells Fargo. A statement from Marci Ryvicker stated, “We think Dish is holding out due to the FCC meeting this Thursday 3/3. While this is just another retrans battle, the timing is interesting given that the FCC is meeting 3/3 and retransmission consent is on the agenda. Our gut feel is that not much comes of the meeting, but we could be surprised. As we have reported previously, any attempts to crack down on current negotiation methods would likely be a positive for distributors and negative for content providers/distributors. We intend to provide our thoughts post the FCC meeting on Thursday.”

RBR-TVBR observation: Poor little Dish, getting bullied around by LIN Media, a company it calls a “corporate media conglomerate.” It’s true that LIN can measure its annual revenues in the hundreds of millions, but Dish pulled in about $12.6B in 2010. By contrast, LIN was expecting to pull in about $415M for the same year.

Dish’s invocation of a 140 percent increase is meaningless without attaching it to a hard number – if the previous agreement called for 10 cents per subscriber, a ridiculously low price, it would not be hard to put up a very gaudy and essentially meaningless percentage.

Broadcasters provide a critical local link for MVPDs, and it helps them sell their service. That, along with the quality programming they provide, are the reasons that broadcast channels are “must-have” items for MVPDs. How are they worth? That’s what a free market negotiation should determine.