Verizon Won't Buy Dish, Telecom Giant's CFO Says
Fran Shammo at the Goldman Sachs Communacopia Conference in New York comments on suggestions that the satellite TV giant's spectrum could be a deal draw for the company.
Verizon CFO Fran Shammo on Thursday told an investor conference that the telecom giant won't buy Dish Network, a scenario some have said could make sense if Verizon wanted to get its hands on the satellite TV company's spectrum.
During a discussion, the analyst interviewing him said he wouldn't ask Shammo about the ongoing FCC spectrum auction. "Don’t ask me about Dish, either," the Verizon CFO added, with the analyst responding by asking: "Are you going to buy Dish?" Shammo replied: "The answer is no."
Verizon, after previously acquiring AOL and Millennial Media and last year launching millennials-focused mobile video service Go90, earlier this year won an auction for Yahoo's core internet business with a $4.83 billion deal.
Speaking at the Goldman Sachs Communcacopia Conference in New York in a session that was webcast, Shammo spent some time touting the company's deal to acquire Yahoo and its emerging video strategy that is all about mobile instead of traditional TV.
"This a growth engine for us in the future," he said. It could take two to three years to build the revenue stream, he signaled. The addition of Yahoo and other pieces of the puzzle will help the company "get the billion-plus viewers that you need to attract advertisers."
Asked about Go90, Shammo said it is in effect an over-the-top product as users often sit at home and watch content via their mobile devices. He emphasized that this is why the company is focusing on a mobile-first strategy and content for mobile, emphasizing that the company is not focused on bringing CBS or other shows over-the-top. "We know what works," and the company will now focus on expanding its audience, Shammo said, adding that when new episodes of shows on Go90 debut, usage pops. He didn't detail by how much.
The topic of synergies from the Yahoo and other recent acquisitions also was touched on. "First we need to integrate these things," then the company will outline synergies in more detail, Shammo said. Verizon management previously told analysts that there would be “meaningful” financial synergies in the Yahoo deal, adding that Verizon was likely the only real bidder with such opportunities, but it has not detailed any figures.
Verizon was this week reported to be in talks to acquire Jason Kilar's subscription-based mobile video service, Vessel, which launched in 2014 to offer early access to content from top YouTube stars. Vessel, which charges $2.99 per month, has fallen silent over the last year, dropping the limited advertising that it was showing to subscribers and, according to sources, not re-upping many deals with creators it once convinced to window their content exclusively on the service for 72 hours. Shammo was not asked about that possible acquisition on Thursday.
“By acquiring Yahoo, we are scaling up to be a major competitor in mobile media," Verizon chairman and CEO Lowell McAdam said in July. "Yahoo is a complementary business to AOL, giving us market-leading content brands and a valuable portfolio of online properties and mobile applications that attract over 1 billion monthly active consumer views. We expect this acquisition to put us in a great position as a top global mobile media company and give us a significant source of revenue growth for the future.”
Verizon has said millennials are a core focus for the company in its emerging video strategy. It also previously acquired a stake in AwesomenessTV, and partnered with Hearst to jointly acquire male-focused media company Complex. Those deals “position us as partial owners in the No. 1 digital media brands for young millennials," Shammo said on a recent earnings conference call.
Shammo on Thursday also was asked about Verizon's skinny bundle Custom TV service, which was recently rejigged, saying that continues to draw consumer interest.
Asked about cable giants Comcast and Charter Communications, which have said they are activating a joint venture with Verizon to start providing wireless services, likely next year, Shammo said "we know the cable companies have to get into the wireless" business as "the world is going to be a wireless world." As the overall pie continues to grow, various companies can see their wireless business grow, he added.
Shammo has previously warned about more contentious carriage negotiations between pay TV operators and content companies. "Obviously, the content providers have the leverage on the linear TV side," he told a conference earlier in the year. Skinny pay TV bundles offered by Verizon under the Custom TV brand help in that regard "by rebundling some of the content there," he argued. "This year, maybe next year, you are going to start to see more, I think, real conflict between content and linear TV providers and more maybe going dark and some content being dropped over time."