Charlie Ergen’s Management Theory: Dumb & Dumber and Seinfeld
Some executives quote philosophers like Plato or legendary coaches such as Vince Lombardi. But not Charlie Ergen; that’s far too high-brow for him. The Dish Network chairman seems to get his theories on management from television and movie comedies.
Just a few quarters after he described Dish’s wireless situation as a “Seinfeld Strategy” (it may not seem clear now but it’ll make sense in the end), the Dish chairman gave a shout out to the Jim Carrey and Jeff Daniels 1994 classic comedy “Dumb and Dumber” on Thursday. When asked by an analyst whether Dish would receive government approval to use its wireless assets, Ergen said:
“I’m hoping. You know that Dumb and Dumber line? I think there is a chance.”
The scene he is referring to is posted above.
Ergen, who has played poker and blackjack professionally, also made some analogies to wagering on Thursday. When asked about the odds of the FCC approving the company’s application for wireless spectrum he said:
“I would go broke betting on Washington. I’m about 0-for-100 in Washington.”
But here’s something for Ergen can count on: the Farrelly Brothers are planning a “Dumb and Dumber” sequel that will reunite Carrey and Daniels in their roles as Lloyd and Harry.
Dish’s kangaroo pitchman doesn’t cooperate
Dish Network went kangaroo-crazy at this year’s CES. Not only did a mascot in a kangaroo suit greet attendees at its press conference, but CEO Joe Clayton took to the stage cradling a wallaby, which resembles a small kangaroo.
Whilst Clayton cuddled the marsupial, someone whispered in the audience: “Does PETA know about this?”
The kangaroo schtick promotes the company’s new set-top box, the Hopper, and its smaller counterpart, the Joey. Together, the devices will let Dish customers record six shows at once that can then be watched in four rooms.
Clayton told me after the show he spent his Sunday at a photo shoot at a farm outside of Las Vegas, posing with kangaroos. He said it was hard to keep the animal still and he had to be careful not to step in kangaroo dung.
Meanwhile, Dish hired trainers and photographers to snap photos of attendees with a live kangaroo and wallaby on Monday. The lines proved longer for the wallaby — the kangaroo was jumpy and looked like he’d rather be anywhere than the Venetian at lunchtime during CES.
Check out this video of the kangaroo “model” to see what we mean by “jumpy”:
What’s Charlie Ergen’s strategy this week?
Satellite TV billionaire Charlie Ergen isn’t a regular on Dish Network’s analyst conference calls these days especially
since he stepped down in May as chief executive (which he still chairs). But when he makes an appearance, nearly as rare these days as one of those biennial dividends it pays, it’s worth a listen.
After losing more subscribers than expected in the third quarter Dish executives pointed to larger rival DirecTV’s hugely successful NFL football Sunday Ticket giveaway as the primary source of competition.
Ergen’s surprise appearance on the call allowed analysts to pivot away from the dreary operational numbers and discuss his vision of the pay-TV space. In May he had described Dish’s hodge podge of investments in wireless broadband and content as the “Seinfeld Strategy”. In other words, it’ll all make sense in the end. We hope for investors’ sake that’s right.
Ergen’s view on competition:
- I think from a macro point of view, clearly DirecTV’s results showed there’s still a big business out there for satellite television on a standalone basis and the rest of the industry absent the phone companies really was negative, so I think there’s still business out there. Satellite is still the most efficient way to deliver video. We’re just not getting our fair share of it yet, but having said that, the other macro trend is we’re continuing to use more consumers are consuming more bits and bites of zeros and wants, could be data, video, it could be voice, so I think that strategically, we believe we have to be in something other than a standalone video business as a Company and we’re in the transition of being able to do that.
That’s going to take some time and it’s unclear whether that’s going to be a smart business decision or not but we think that the way that the zeros and ones come together are going to be beyond just video and you’re going to need to be beyond fixed video to the home, so that’s a path that we’re on strategically and we think that’s going to pay dividends for us long term.
Ergen’s views on rising programming costs:
Charlie Ergen: Satellite cowboy, TV viewer, pitchman
Charlie Ergen is best known in media business circles as the straight talking homely founder of satellite TV provider Dish Network Corp. He’s often been disarmingly honest on quarterly conference calls with Wall Street analysts by admitting that he had personally taken his eye off the ball when the company was losing customers a few years ago or putting his annual family vacation ahead of being present on the quarterly call.
Well Dish Network’s marketing team is hoping that Ergen’s southern gentleman charm can win over new customers or at least keep old ones in the pay-TV wars versus DirecTV Group and the various US cable operators.
Ergen appears in a new in-house produced campaign below talking about his pride in the company he founded, his “embarrassing” picture from his early days, and its recent success in customer service etc.
Dish Chief Marketing Officer Ira Bahr said that his boss is a “plain-speaking, easy-to-understand American TV viewer” just like the kinds of people the company is trying to win over in a business sector where there is so much “yelling and price competition” between the various players (Dish has been as guilty as anyone in that respect as you can see here and here).
But outside of crisis management does recruiting the boss as your top pitchman really work for a major national brand campaign? The closest most recent example would be mobile phone company Sprint CEO Dan Hesse, who first hit our screens in a black & white stylish campaignsoon after he joined in 2008. Sprint’s fortunes haven’t exactly improved since the end of 2007 the last quarter before he joined the company. Sprint has lost more than 5 million customers, though the rate of those losses appear to have narrowed in recent quarters. Bahr argues that a professional CEO as pitchman doesn’t have quite the same marketing resonance as that of a founder CEO like Ergen and Dish is currently on the up having already added 700,000 customers in the last year or so.
But what does branding professional Allen Adamson think of Dish’s ad spot?
Adamson, who is managing director of branding agency Landor Associates and author of BrandDigital, said: “It’s a fairly tricky thing to do. Personalities of CEOs don’t necessarily always match up with the brand and ultimately may not be persuasive. It really is about how credible and powerful a communicator the CEO is. (Ergen’s) techy personal matches his office with model rocket by the window and lends some credibility but I still feel that he is not the best way to tell the Dish story”
This is the Dish of old. Personable attentive customer service. I have been a loyal customer of dish since it’s inception in 1996 and have experienced the change in customer service to the point of disconnection from it’s consumer. They no longer accept telephone calls at the corporate level and in addition only receive written communication by snail mail and PO box. My advice if you want good customer service look elsewhere.
Dish’s Charlie Ergen: Me and Mel don’t have a beef
Ah the media, we love a ruckus. We really do. And when the two pugilists are characters as colorful and savvy as Dish Network’s founder Charlie Ergen (left) and Siriux XM Satellite Radio CEO Mel Karmazin (right) we do really get excited.
If you remember, Ergen was widely reported last month to have made a back door bid to take a stake in Sirius XM by quietly buying up some of the satellite radio company’s outstanding debt. Analysts and experts came up with all kind of theories as to Ergen’s ambitions including taking complete control of Sirius on the cheap, combining various satellite assets, and kicking Mel out.
At the time Ergen ‘s official channels at Dish and EchoStar declined to comment on the matter. So today’s Dish earning call was the first time we heard from the man himself on the matter. Well, it turns out the press was right on most things connected with the Sirius bid, according to Ergen. Except for one thing: he does not have bad blood with Sirius CEO Karmazin.
Here’s Ergen from the conference call:
I would take this opportunity to say one thing that clearly was not true is there wasn’t, at least I can speak for my end, there’s no annimosity toward Mel, Parsons [former XM chair] or anything like that.
I don’t know where they got that. Certainly not from our side.
Really?
Maybe the stories of an old feud were overplayed, but there might have something other than pure cold financial logic that influenced Mel’s final decision on this deal. Liberty Media beat Ergen in the bid for a stake in the beleaguered satellite radio business by offering to pay off Sirius’ due loans. In an interview with Reuters shortly after winning the Sirius bid last month, Liberty Media CEO Greg Maffei implied there may have been some… ahem, personality issues in its favor.
Liberty: Stern is safe — for now
So after two weeks of following all the twists and turns of Sirius XM’s attempts to avoid bankruptcy, CEO Mel Karmazin decided on John Malone, founder of Liberty Media, to come in as Sirius XM’s white knight with a $530 million loan . The loan will cover the satellite radio provider’s looming debt and help it avoid bankruptcy. As part of the deal Liberty will eventually take a 40 percent stake in Sirius’ equity.
But does this mean the big money deals that Karmazin signed with the likes of Howard Stern, Oprah Winfrey and Major League Baseball will get re-worked at a more favorable rate for the company now that there’s a new major stakeholder?
No, says Liberty Media CEO Greg Maffei in an interview with Reuters.
You can look and say some of these content deals were cut at a time when there were two guys (Sirius and XM) bidding against each other in a relative frenzy. Having said that, a lot of these content relationships like Howard Stern are very valuable to this company, have been important in building the company, and are likely to be important in sustaining it.
But Stern isn’t quite out of the woods.
I’ll rely on Mel and his team to think about how those content relationships look going forward and make the right decisions,” said Mafffei. “All those content (deals) have some term and they’ll get renegotiated or reset at that time for the value that they’re then creating.
With Sirius generating net operating losses which hit $217 million in the third quarter, it would make sense that Liberty might suggest that Karmazin looks at trimming one of its biggest outgoing cashflows: talent costs. But Mafffei seems not to agree.
I too would probably dump SiriusXM without Stern. That said, I do love the music channels and also tuning into Foxnews during breaking news. It would be harder without Stern.
Sirius XM shares are — wait for it — higher!
Sirius XM shareholders have seen a lot of dark days — face it, we’re talking about a stock that dropped to 15 cents a share. But today isn’t one of them. At least so far.
Indeed, shares of the satellite radio company jumped 100 percent after Liberty Media Corp agreed to lend it $530 million, allowing Sirius XM and its leader, Mel Karmazin, to sidestep a debt crisis.
The deal comes after a breathless week during which Sirius XM came under threat from EchoStar Corp and its top man Charles Ergen, a longtime rival of Karmazin, and looked very close to bankruptcy.
Now, Liberty Media Corp and yet another media mogul, John Malone, have come to the rescue. Here’s the deal, according to Reuters:
Under the agreement, Liberty would first provide a $280 million senior secured loan to Sirius XM, of which $250 million would be funded on Tuesday to help the satellite radio company repay $171.6 million in convertible notes maturing today.
Karmazin, Ergen and Malone: paper tigers?
When media moguls duke it out, what’s their battleground? Newspapers, evidently.
For the past week, EchoStar boss Charlie Ergen and Sirius XM radio’s CEO Mel Karmazin have been doing battle on the pages of two venerable dailies, The Wall Street Journal and The New York Times. The Journal had a head start on the story, reporting how Ergen had started buying up Sirius debt in an attempt to force the satellite radio company into a deal. Then, it revealed how Ergen had actually made an offer to buy Sirius, which Karmazin rejected.
While the rest of the media was digesting all this, out came the Times with a story that said Sirius was preparing for a Chapter 11 bankruptcy filing, which could come within days. It had even hired bankruptcy experts, the Times wrote. The Journal quickly swatted that idea down, saying:
“The hiring of bankruptcy and restructuring advisers, while not surprising given the company’s financial predicament, doesn’t mean a filing is imminent.”
It refined that idea in a story Wednesday night, taking a direct swipe at the Times’ reporting:
“This week, Sirius representatives responded to Mr. Ergen’s move by spreading word that the company was preparing to file for bankruptcy and had hired bankruptcy and restructuring advisers. Company officials also privately told investors that Sirius has entered a “zone of insolvency” and that a bankruptcy filing would be preferable to cutting a deal with Mr. Ergen, according to people who participated in the discussions.”
The New York Post has since gotten into the game, and all three papers reported on Wednesday the appearance of a “white knight” in the form of Liberty Media’s John Malone, who controls DirecTV.
