After 37 years as Chairman of DISH Network Corp., Charlie Ergen can no longer add the title “CEO” to his role at the Englewood, Colo.-based direct broadcast satellite (DBS) service provider.
Effective immediately, Ergen has relinquished his post as Chief Executive Officer “to devote more attention to the company’s emerging wireless business.”
As a result, Erik Carlson has been promoted to President/CEO from President/COO.
And, he will continue to report to Ergen — a sign that he will still remain the company’s leader but shift his focus away from DISH TV and Sling TV over-the-top (OTT) offering.
Carlson has been with DISH since 1995. Under his leadership, the company “will assume a group structure to more effectively organize the company’s operational and staff leadership to support DISH TV, Sling TV and the company’s wireless business.”
Prior to his most recent role, Carlson managed DISH’s In-Home Services, Customer Service Centers, Customer Billing, and Information Technology organizations, as well as Manufacturing, which consists of equipment retrieval and refurbishment operations. Carlson also served as SVP of Retail Services and Sales, where he managed the company’s indirect sales operations.
“With more than 20 years’ experience at DISH, Erik brings a complete understanding of the business opportunities both DISH TV and Sling TV possess,” said Ergen. “I have every confidence that under Erik’s leadership our new organizational structure will deliver value for DISH TV and Sling TV and will aid our entry into wireless.”
Executives reporting to Carlson include Brian Neylon, who will serve as EVP/Group President for DISH TV. He was previously EVP/Customer Acquisition and Retention, and will now have accountability for all aspects of the DISH TV group’s strategy and performance.
Neylon will retain oversight of the company’s Customer Acquisition and Retention departments.
SLING SHOT FOR SCHLICHTING
Meanwhile, all eyes are on the new role for Warren Schlichting, a nemesis for many broadcast TV operators who have had difficult retransmission fee deal negotiations with DISH in recent months.
Schlichting will now serve as EVP/Group President for Sling TV.
That’s a big change for Schlichting, who vehemently and vigorously defended DISH’s side of failed retrans fee deals for DISH Network as its EVP/Marketing, Programming and Media Sales.
Now, Schlichting will have accountability for all aspects of the Sling TV group’s strategy and performance while retaining oversight of the DISH Media Sales and Programming departments.
It now appears that Neylon will be the individual looked upon to ensure that there are few future impasses between TV station owners and DISH.
Other leadership changes include giving Carlson’s former COO duties to EVP John Swieringa. He will oversee all operational departments supporting the company’s DISH TV, Sling TV and Wireless groups, including the company’s customer support centers, its in-home installation workforce and the company’s IT department.
Additionally, EVP/Chief Technology Officer Vivek Khemka joins Carlson’s leadership team. Khemka’s DISH Technologies organization supports DISH TV, Sling TV, and the wireless business. The organization is responsible for technology strategy, product management, engineering, product development, supply chain management, broadcast operations and OTT delivery.
In addition to restructuring the current executive team, DISH appointed Walmart veteran and human resources executive David Scott to the role of Chief Human Resources Officer (CHRO). Scott will serve DISH as an EVP and will join DISH’s management committee in February, reporting to Carlson.
Tim Messner, EVP and General Counsel; Steve Swain, SVP/Chief Financial Officer; and Robert Toevs, VP/Corporate Communications, will report to Carlson.
In addition to Carlson, Ergen’s direct reports will include Tom Cullen, EVP/Corporate Development; Bernie Han, EVP/Strategic Planning; and Jeff Blum, SVP/Public Policy and Government Affairs.
Among the broadcasters that have had particularly difficult retrans fee reups with DISH are Hearst Television and CBS Corp., the most recently highly publicized impasse, which surprisingly ended right before Thanksgiving Day — even though CBS suggested the standoff could drag well into December.
This suggests that a leadership change at DISH was in the works, leading to Schlichting’s shift in focus primarily to the fast-growing Sling TV division.
DISH in Q3 saw its net income dip to $297.38 million (57 cents per diluted share), from $327.84 million (67 cents).
But, Sling TV is seeing faster growth than the flagship DISH DBS service, the company has noted. And, it’s cheaper for DISH to add Sling customers, too.
In its 10-Q filing with the SEC for the third quarter of 2017, DISH notes, “Subscriber acquisition costs for Sling branded pay-TV subscribers are significantly lower than those for DISH branded pay-TV subscribers, and therefore, as Sling branded pay-TV subscriber activations increase, it will have a positive impact on Pay-TV SAC.”
How many Sling TV customers does DISH have?
“All Sling branded pay-TV subscribers are included in our Pay-TV subscriber count,” the company noted in its 10-Q. Analysts’ queries on this subject have routinely been dismissed by DISH executives on company quarterly earnings calls.
“To the extent that our Sling branded pay-TV subscriber base grows, our Pay-TV churn rate will be positively impacted,” DISH said in the SEC filing.
But, Pay-TV ARPU was $87.01 during the nine months ended Sept. 30, 2017 versus $89.12 during the same period in 2016. The $2.11, or 2.4% decrease, in Pay-TV ARPU was primarily attributable to an increase in Sling branded pay-TV subscribers as a percentage of the company’s total Pay-TV subscriber base and a shift in DISH branded pay-TV programming package mix to lower priced programming packages.
“Sling branded pay-TV subscribers on average purchase lower priced programming services than DISH branded pay-TV subscribers, and therefore, the increase in Sling branded pay-TV subscribers had a negative impact on Pay-TV ARPU,” DISH said in the filing. “We expect this trend to continue.”