Ergen and his four siblings grew up in Oak Ridge. His father was an Austrian-born nuclear physicist who worked on the Manhattan Project. Ergen’s first real job out of school was as an accountant at Frito-Lay. He quit to work as a professional gambler, with blackjack his preferred game. He was so good at counting cards that he has told reporters he was once tossed out of a Las Vegas casino.
At Dish, he still keeps a counter’s eye on the numbers. Up until a few years ago, as he noted at a recent talk at the University of Colorado, Ergen signed every check that left Dish headquarters, a process that took him three to four hours a week and left him with an unparalleled understanding of how money was moving out of the company. He still signs company checks today, though now that Dish has $14.3 billion in annual revenue and $2.4 billion in operating expenses, Ergen reserves his signature for anything over $100,000.
At Dish headquarters in Englewood, a suburb of Denver, the day begins no later than 9 a.m. Badges used to be the preferred method of entry into the building. But a few years ago, after noticing that some employees were taking advantage of the system by having others badge-in for them, Ergen upgraded to fingerprint scanners. If a worker is late, an e-mail is immediately sent to human resources, which then sends another to that person’s boss, and sometimes directly to Ergen.
Multiple ex-employees say it’s not uncommon to see Ergen publicly berate an executive for scanning in a few minutes late, even if that executive had spent the previous 12 hours at home working through the night. Neuman, when he was still president, refused to implement Ergen’s proposed strict badge-in policy. He worried it might be “demoralizing.”
At a quarterly meeting a few years ago, Ergen expressed frustration that some employees couldn’t make it to work on time when there was snow on the ground. As a solution, he encouraged employees to book nearby hotel rooms—at their own expense—when the weather report called for a few inches of powder.
Employees, both current and former, describe an Ergen-created culture of condescension and distrust. Vikas Arora, a manager on Dish’s international content acquisition team, had never worked anywhere else in the U.S. until he left the company last year. That’s when he discovered that “outside of Dish, people are actually treated like adults.”
Whereas many companies are doing their best to cater to millennials who demand flexibility among other benefits, Dish doesn’t allow its employees to work from home. It offers no company credit cards. And according to a former regional manager, for many years, if an employee expensed a meal where they’d tipped more than 15 percent, the extra amount was then subtracted from his paycheck, even if he’d only gone over by a nickel.
One employee, who still works for Dish and asked not to be named to protect his employment, described a rare gift from the company a few years ago. As in most quarters, Dish had set up a new-subscriber goal. When that target was met, the company told employees they didn’t have to come in on the day after Thanksgiving. It was, the employee says, the first and last four-day weekend he’s ever had in 10 years at Dish.
Turnover is said by many employees to be constant, and while no one knows exactly how many employees are laid off during regular quarterly cullings, all employees are aware of the company’s euphemism for the bloodbaths: “talent upgrades.” There’s a running joke on glassdoor.com that Dish is an acronym for “Did I sleep here?”
Ergen treats outsiders, including major investors, with equal disdain, and Wall Street gets little love from him. Longtime analyst Craig Moffett still remembers the first e-mail he received from Dish. It was 10 years ago, and he had just started his job as senior analyst of U.S. telecommunications, U.S. cable, and satellite broadcasting at Sanford C. Bernstein (AB). He asked if he could fly out to Denver to sit down with management to get a better idea of how Dish did business. The response: “We’re too busy creating value around here to sit down and talk about it. Thanks but no thanks.”
Moffett’s relationship with Dish hasn’t changed, even though Moffett has been ranked the No. 1 analyst in his field seven years in a row by Institutional Investor magazine. “I don’t think there’s a company like Dish on Wall Street,” he says. “It’s not hostility; it’s absolute apathy. They just don’t show any signs of being concerned with what the sell-side community thinks. I’ve almost given up trying to contact them. Eventually you get trained; it’s just not worth your time to ask.”
Some investors have gone to extraordinary lengths to buttonhole Ergen. During the 2008 presidential race, he hosted a $2,300-a-plate fundraiser for Hillary Clinton at his home. When the Clinton campaign team discovered that one of the attendees was a first-time donor to the Democratic Party, it offered him a private meeting with the candidate, according to someone with knowledge of the event but who agreed to speak on the condition of anonymity. To the campaign’s surprise, the man declined. “No, no, no,” he said, “I just want to meet Charlie.” (Ergen ended up supporting John McCain.)
Even the largest investors get the cold shoulder. Chris Marangi is a portfolio manager at Gamco Investors, which holds 4 million shares. Marangi says Dish goes out of its way to be uncooperative. Despite traveling to Denver often, he has yet to meet with Ergen or any other Dish executive. Like every other company, Dish sends out a press release at the end of the quarter to announce earnings. But Marangi contends that Dish sends its release out just late enough to be of no use to him and other analysts, so they’re forced instead to search through its 10-Q, the long Securities and Exchange Commission-mandated filing that can run more than 50 pages. “They’re probably the least transparent company of any I’ve ever dealt with,” says Marangi.
Yet Gamco, along with scores of other institutional money managers, continues to invest in Dish—and mostly because of Ergen. “Dish is run for shareholders, and one shareholder in particular,” Marangi says of Ergen. “It’s his money. And he’s got far more riding on the line than we do.”
Ergen has maintained majority voting interest in both his companies: over 90 percent in Dish and more than 75.6 percent in EchoStar. According to Bob Scherman, the editor of Satellite Business News, Ergen once said that former MCI Chief Executive Bert Roberts Jr. told Ergen that if he wouldn’t let Roberts buy Dish he might face a hostile takeover. Ergen, with almost complete control, laughed at him. “Good luck to you,” he told Roberts.
