Ending the three-month scuffle, Dish Network Corp. (NASDAQ:DISH) reached a new retransmission agreement with Tribune Broadcasting, a subsidiary of Tribune Media Company (NYSE:TRCO) . This fresh contract puts an end to the blackout of Tribune Broadcasting’s channels on Dish Network since June this year. The financial details of the deal are yet to be disclosed.
Blackouts related to carriage pricing reasons have become a common occurrence in the pay-TV industry, with some deadlocks running into weeks or months, much to the angst of subscribers. The growing inclination of broadcasting houses to demand higher fees is largely a result of the recent rise in content programming charges. Dish Network has also been in the news for locking horns with major broadcasting companies like Viacom, Inc. (NASDAQ:VIAB) and Comcast Corporation (NASDAQ:CMCSA) -owned NBCUniversal.
The DISH-Tribune Clash
Both the parties have been in disagreement over the retransmission rates and packaging of Tribune Broadcasting’s local as well as WGN Networks channels. Meanwhile, Dish Network has been reluctant to pay the raised amount owing to declining viewership of Tribune Broadcasting’s content. However, the recent signing of the long-term contract is a positive development for both the companies.
The Bottom Line
Dish Network’s ability to stay abreast in the competitive pay-TV industry depends, among other things, on its capacity to continue to broadcast popular programs and deliver the same to subscribers at competitive rates. Thus, the company’s margins may face pressure if it fails to renew long-term programming contracts on favorable pricing and other economic terms. However, in case such an issue crops up, prompt settlement with the broadcaster will help Dish Network to put a check on subscriber churn.
Dish Network currently has a Zacks Rank #3 (Hold).
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TRIBUNE MEDIA (TRCO): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis Report
VIACOM INC-B (VIAB): Free Stock Analysis Report
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