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DISH Settles Dispute With Univision, Signs Long-Term Contract

Zacks Equity Research

DISH Network DISH subscribers’ accessibility to Univision Communications channels were restored after the companies settled their nine-month long dispute by signing a long-term agreement on Mar 26. However, terms of the deal were not disclosed.

The settlement provides a breather to DISH as the availability of popular channels like Univision, UniMas, Univision Deportes Network, Galavision, Tlnovelas and FOROtv is expected to limit erosion in the Spanish-language subscriber base.

Notably, in fourth-quarter 2018, DISH lost 334,000 Pay-TV subscribers against the addition of 39,000 in the year-ago quarter. The unavailability of Univision channels as well as AT&T’s T HBO accounted for the loss of more than half of the net subscriber.

Following the agreement news with Univision, DISH’s stock gained 3% to close at $31.54 on Mar 26. Shares have surged 26.3% on a year-to-date basis, compared with industry’s rally of 18.1%.


Blackout Hurting Subscriber Base

Unavailability of channels due to disputes over rates, fees related to programming rights or retransmission content has been rattling DISH for some time. Apart from the Univision and HBO issues, the company’s subscribers faced blackout from TEGNA TGNA in early December 2018.

Although the TEGNA matter was settled quickly, the company has failed to resolve the HBO dispute with AT&T. In fact, DISH expects more subscriber loss in the near term due to the unavailability of HBO’s hit show Game of Thrones.

DISH has blamed AT&T’s anti-competitive stance behind the blackout. It believes that AT&T’s demand to subsidize both HBO and Cinemax (even if customers choose not to subscribe to both services) is not beneficial for its subscriber base.

It is also suffering from competition and cord-cutting. Moreover, Sling TV subscriber base is increasing, though at a much slower rate. Additionally, escalating programming and content expenses, retransmission fees and failure to strike any deal with wireless operators are also major concerns.

Zacks Rank & A Key Pick

DISH currently has a Zacks Rank #3 (Hold).

Comcast CMCSA is a stock worth considering in the same industry as it has Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Comcast is pegged at 12.2%.

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