Just weeks after Dish was ordered to pay the AMC network a $700 million settlement following a lawsuit that initially sought $2.4 billion, the satellite provider reported a third-quarter loss due to, and cited the litigation costs as the reason.
The loss was a personal humiliation for CEO Charlie Ergen, who previously told Wall Street that no one watched AMC, and its shows about zombies. Yet Dish lost subscribers during the period in which AMC was off Dish.
Dish attributed its loss not only to $730 million in court bills but also higher programming costs and increased advertising costs related to its Hopper set-top box in the quarter.
Net income was reduced by $453 million, according to The Wrap. Except for that, Q3 net income would have been $295 million. The company posted a loss of $158.5 million, compared with a profit of $319 million in the year-ago period. Revenue declined from $3.60 billion to $3.52 billion.
The company also said it lost about 19,000 subscribers on a net basis after Dish dropped Cablevision channels earlier this year, leaving subscribers without popular shows such as "Mad Men," "Walking Dead," and "Breaking Bad."
But at least one analyst believes the third quarter loss is not due to litigation, but instead "points to a company whose core business is still struggling... badly," Bernstein Research's Craig Moffett said in a note, per The Wrap.
Ergen, who, in August, said his customers don't watch channels like AMC because "they live on farms and ranches," may now be eating his words.
Here's Ergen's exact quote from a Q2 2012 conference call with Wall Street analysts:
I've had satellite television for as long as satellite television has been around and there's never been one minute that I know of anybody in my family, or anybody who's came to my house, has ever watched one second of any of those channels.
We have data, real data from our customers. And for whatever reason our customers don't watch some of those ... at the level that we read about in the paper, perhaps because we skew a bit more rural or whatever. They live in farms and ranches ... They have no clue about zombies and New York.
After reporting the lower Q3 earnings, Dish said in a statement: "Our gross new subscriber activations continue to be negatively impacted by increased competitive pressures, including aggressive marketing and discounted promotional offers."
Related:
- AMC Channels Return To Dish After $700M Settlement Finally Reached >
- Ceasefire In Dish v. AMC War Is Either A 'Possible Settlement' Or A 'Mistake' >
- New Emails Hurt Dish 'In A Big Way' In Battle Against AMC >
- The 11 Craziest Moments In The Dish vs. AMC Cable War >
- Dish CEO Says Customers Don't Care About AMC Because They Live On 'Farms And Ranches' >
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