Is Dish Network Going Out of Business?

What’s going on with Dish Network? Dish Network has been in the murky waters for long. There has been a lot of controversy surrounding the brand. The most prominent question that the company has faced multiple times is – Is Dish Network going out of business today?

In this article, we will discuss the shortfalls of the company and if the controversy is worth it.

So, without waiting much, let us jump right into the topics. However, if you are completely new to the Dish Network controversy and the brand as well, we are here to help you know it better.

Dish Network & Its History

DISH Network L.L.C. stands for “Digital Sky Highway.”

The whole operation is a subsidiary of EchoStar, offering multi-channel television, satellite television through Dish Network, mobile phone services through Dish Wireless, Boost Mobile, and the Boost Infinite, as well as over-the-top IPTV services via Sling TV.

Founded in 1980 by its current chairman Charlie Ergen, EchoStar, at the time it applied for a DBS license through the Federal Communications Commission, had been granted the orbital slot at 119° west longitude in 1987.

In 1996, EchoStar made additional satellite launches for the DBS service in its Dish Network.

In 2007, the company completed the corporate spin-off of its technology and infrastructure assets into another public corporation called EchoStar, and the remainder of the company was renamed DISH Network Corporation.

Joseph Clayton became chairman in 2011, with Charles Ergen remaining chairman.

Also in 2011, Dish Network spent $3 billion buying companies out of bankruptcy: Blockbuster, DBSD, TerreStar Corporation, and its former investment in Voom HD Holdings, and four related overseas companies.

In 2011 Dish petitioned the Federal Communications Commission to permit it to combine the S-Band spectrum that it acquired from DBSD and Terrestar with LTE.

In 2019, EchoStar transferred its Broadcast Satellite Services business to DISH to focus on broadband services.

Satellite TV provider EchoStar has announced that it completed the purchase of competitor DISH Network this morning for $26 billion.

The Echostar Dish merger took place on December 31, 2023. Two of the nation’s largest providers of satellite and wireless services are combined into one telecom giant.

Under the terms of the agreement, DISH Network has become a wholly owned subsidiary of EchoStar.

Who owns Dish Network?

Well, after the merger EchoStar owns Dish Network and is run by co-founder Charlie Ergen.

EchoStar/Dish Questions Ongoing Viability

Now EchoStar/Dish Network, in a newly filed SEC document, says it has raised “substantial doubt” in its ability to remain a going concern.

The deal married Dish’s satellite, streaming, retail wireless business, and emerging 5G network with EchoStar’s satellite-focused business, partly in a bid to free up cash for Dish’s 5G network build-out.

With debt maturities not until 2024 and the expectation to burn a significant amount of cash over the next 12 months, the financial condition for EchoStar/Dish is shaky at best.

The firm also cannot give any assurances on financing new debt or restructuring its current obligations to allow for it to follow through with plans to build out a 5G network.

New Street Research said EchoStar should manage to raise $3.2 billion of spectrum-backed notes out of its DBSD and TerreStar holdings and an additional $4.3 billion against AWS-3 licenses.

Expecting A Change Is Unrealistic

The pay-TV mobile subscriber landscape has been a threat to the future of Dish. Nathanson analyst Craig Moffett has rung the death knell because of a worsening subscriber base and the deteriorating pay-TV mobile landscape.

He said that Dish’s business is spiraling down towards bankruptcy with revenues further going down in all segments.

Moffett pointed out that Dish is losing subscribers in every business, while defections of senior management continue each quarter.

For instance, Michael Kelly was among those who quit.

Losses Continue Among Subscribers

Dish this week reported numbers that show in Q4 2023 it added a net loss of 123,000 Boost prepaid subscribers, a 35.1% decline from the same quarter a year ago, leaving it with 7.38 million subscribers.

Across the board, the company’s gross adds stood at 609,000, down 35.1%, while the average revenue per unit across the period fell by 4.2% to $36.04 ARPU.

Dish’s own 5G network outlay was also down, at $427 million for capex compared to $856 million for the year-ago quarter.

The Boost prepaid and 5G businesses are de minimis operating assets that matter little in all but the very worst cases of bankruptcy.

Dish expects to not be required to exercise an option to purchase T-Mobile’s 800MHz spectrum, and its pay-TV subs declined by 314,000 in the quarter.

YouTube TV’s sub-base has now surged past that of the entirety of Dish’s satellite TV business and is coming close to topping Dish’s satellite and streaming video business combined.

EchoStar shed 59,000 broadband satellite customers, bringing the overall base to around 1 million.

The declines of the combined business could wipe away potential gains from the synergies that a combined company would hope to achieve.

Dish Network’s Financial Results In A Gist

On the financial end, EchoStar came up with consolidated Q4 2023 revenues of $4.16 billion from $4.53 billion in a similar quarter last year, combined with losses in subscribers, leading to a net loss amounting to $2.03 billion.

Q4 revenues of Dish pay-TV fell 9.3% to $2.81 billion.

Retail wireless was $898.28 million, decreasing from $928.09 million the previous year. Broadband and satellite services were $447.77 million, down from $499.85 million.

Dish shares were down 85 cents (-6.48%) to $12.26 each on 1st of March 2024, Friday morning.

Dish Network Bankrupt? Bankruptcy Events & Supportive

Dish Network is also reportedly going to file itself bankrupt, given the rather tricky set of corporate and financial transactions made.

EchoStar Corporation acquired Dish Network just this one year ago, when Hamid Akhavan took the post of president and CEO, while Charlie Ergen remained as chairman.

EchoStar has put out confusing press releases, as well as SEC filings with exchange offers for its 0% Convertible Notes due 2025 and its 3.375% Convertible Notes due 2026 for its 10.00% Senior Secured Notes due 2030.

Legal analysts believe that EchoStar is entering bankruptcy while reorganizing assets and liabilities, such that liabilities disappear into entities that are under the Dish umbrella.

However, this is where the analysis becomes more or less full of gaping holes. First and foremost, Dish Network is still going into bankruptcy.

It is not practicing, but speculation is that it might even go bankrupt due to its low cash and high-interest debt, coupled with the fallout of April 1, 2024, if it does not either pay T-Mobile $3.5 billion for 800 MHz spectrum or desist from buying that spectrum.

Dish 5G Network

Wireless provider Dish is walking a bankruptcy tightrope by constructing a 5G network across the nation. That network was part of what DoJ signed off on to allow T-Mobile’s acquisition of Sprint in 2020.

How the DoJ and the FCC will react now that the company is going bankrupt could range from supporting its entry into bankruptcy, seeking another wireless competitor outright, or deciding that three wireless operators are plenty.

Policy analyst Blair Levin of policy advisory group Newstreet said the DoJ and the FCC could take this as an opportunity to either support the Dish bankruptcy or take a different approach.

Spectrum Of Dish

In addition to the financial filings EchoStar has been making to protect its valuable spectrum, Dish is also up against a deadline to cover 75% of the US population by mid-June 2025.

This will be more expensive since less area coverage will be realized under that period. If Dish fails to reach this deadline, it loses its spectrum licenses.

That’s the worry of Charlie Ergen, the owner of the spectrum by Dish.

The question is whether EchoStar is ready to move ahead and finish the job, or whether it’s finagling to at least get a little protection down at the FCC beyond their licenses.

Is Dish Network Going Out Of Business: Ransomware Attack On Dish Network

The huge ransomware attack in February 2023 crippled Dish Network, laying the company low with internal outages and a loss of service at subsidiary companies such as Boost Mobile, as well as mass data theft.

It had to secure outside experts to address the issue amid this coverage, which sent the company’s share price to lows seen over 14 years ago.

Outages had been dragging on for over a month, and customers reported waits of more than 14 hours to get through to customer service.

Dish Network was positively excoriated for being not in the least transparent or in touch with its customers in the wake of the ransomware attack.

Final Thoughts

February 2023 saw lethal ransomware attacks at Dish Network, which resulted in data theft, disturbances in service, and waiting times of more than 14 hours for customer service calls.

Its stock dropped to almost a 15-year low.

Dish Network was blamed as being not that transparent and poor in communication with the customers.