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DISH Network (DISH) Customers Face NFL Network Blackout

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Subscribers of DISH Network Corp. are facing another blackout, this time from NFL Networks. Both the parties locked horns over carriage renewal fees, which have been deemed as too high by DISH. Due to the ongoing dispute, NFL Network and NFL RedZone channels have gone dark on DISH’s network from Thursday evening. We remind investors that DISH Network is also involved in a dispute with Tribune Media over another carriage agreement.

The Current Scenario

After the expiry of the NFL contract, the two parties are at a stalemate over carriage renewal fees. DISH has had similar spats with Comcast Corporation (CMCSA - Free Report) -owned NBCUniversal, AT&T Inc. (T - Free Report) and Grupo Televisa, S.A.B. (TV - Free Report) -owned Univision in the past. The present trend of broadcasting houses demanding higher fees is largely due to an rise in content programming fees over the past few years. As a result, blackouts related to carriage pricing disagreements have now become a common occurrence within the pay-TV industry, with some deadlocks running into weeks or months, much to the angst of subscribers.

To Conclude

NFL is insanely popular among American subscribers, with statistics indicating that all of the most-watched shows in 2015 comprised NFL games. Sunday Night Football is another extremely popular show for football fans in the country. Given millions of viewers following the NFL games, it is clear that DISH will suffer massive customer loss if it fails to renew the NFL Network contract. DISH Network’s ability to compete successfully depends partly on its ability to continue obtaining desirable programming and delivering the same to its subscribers at competitive prices. Therefore, inability to renew long-term programming contracts on favorable pricing and other economic terms would weigh heavily on the company’s margins. Moreover, frequent blackouts could induce discontent among subscribers, leading to an increase in the customer churn rate, going forward.

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

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