CEO Of Dish Network Parent EchoStar Gauges Bankruptcy Risk, DirecTV Merger Prospects After Company Posts Spotty Q1 Results And Stock Falls

Dade Hayes
·3-min read

Shares in Dish Network parent EchoStar have fallen more than 11% after the company’s lackluster first-quarter earnings report and growing uneasiness about the company’s financial state.

Hamid Akhavan, the head of EchoStar since March 2022 who added the CEO duties at Dish last November as the companies were getting set to close their merger, presided over a call with Wall Street analysts. Charlie Ergen, who founded and ran Dish and is now EchoStar’s executive chairman, was not present for the call.

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Akhavan was peppered with questions about the company’s status, particularly in light of the “significant concerns” it raised earlier this year about being able to remain a going concern. Debt repayments of about $3 billion due this year exceed the company’s cash on hand, and execs have been scrambling to secure more time and access to additional funds. EchoStar has a market value of about $4.1 billion.

The company reported total revenue of $4.01 billion in the quarter ended March 31, down from a pro-forma $4.39 billion in the year-ago quarter. Diluted losses per share came in at 40 cents, compared with earnings of 82 cents in the same period of 2023. Both metrics undershot analysts’ consensus forecasts.

Pay-TV declines moderated a bit, with 348,000 subscribers leaving in the quarter, compared to with the year-earlier’s decrease of 552,000. The company now has 8.18 million pay-TV subscribers, 6.26 million on Dish satellite systems and 1.92 million on the internet-delivered Sling TV service.

While the satellite firm is continuing to pivot from pay-TV to wireless, its legacy footprint is less of a strategic focus than it once was. Akhavan was asked for his current thoughts about Ergen’s pronouncements in past years that a merger between Dish and satellite rival DirecTV is “inevitable” as both feel the effects of broader industry cord-cutting.

“I can’t speak to how inevitable it is,” the CEO said. “To me, obviously there are significant synergies there, when you look at the two businesses being in the same space. Both businesses are under attack from the content providers and [face] other challenges. The opportunity is there, has always been there. It’s a matter of us getting to finding the right time and economics to look at it.”

Rather than M&A, he said solving the company’s “immediate financing needs” and building a sustainable and viable company are the two priorities taking “99% of my time,” he added.

Asked directly by one about the company’s strategy if it “doesn’t or shouldn’t file for bankruptcy,” Akhavan said, “Our recipe is very simple, candidly. Can we push the maturities out … so that we have enough cash to operate the business? We’re very bullish about our prospects for operating the business if we have the capital to execute that. While we’re working on that financing, we aren’t sitting on our hands.”

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