Dish Subscribers, Earnings Drop in Third Quarter

NCTA Cable Show Technicolor - H 2014
Courtesy of Technicolor

NCTA Cable Show Technicolor - H 2014

Company chairman Charlie Ergen belittles Turner Broadcasting in the midst of a carriage dispute

Dish Network on Tuesday reported lower third-quarter earnings as it lost subscribers and had higher expenses, and chairman Charlie Ergen took a few swipes at Turner Broadcasting, several channels of which the satellite TV company has stopped carrying.

Ergen said Dish is prepared to do without CNN and other Turner channels, noting that CNN "is not a Top 10 network anymore." He then quipped: "unless they find the Malaysian plane."

"We know how many minutes people watch CNN and how many minutes they watched five years ago and it's hard to pay a double-digit price increase for something that people are watching half as much as they used to watch," he said.

Dish hasn't had Turner's channels, except for TBS and TNT, since Oct. 21 as the unit of Time Warner and the nation's second biggest provider of satellite TV have been unable to reach a carriage agreement.

At one point, he called losing CNN, Cartoon Network and the other channels a "non-event," and he hinted that TBS and TNT are expendable, too, if he doesn't like the price.

"I would guess that if you're Turner and if we're not going to carry CNN or Cartoon Network then I'm not really excited when your contract's up to carry TNT and TBS," Ergen said. "So, we have to be prepared that those channels will come down as well. Those will be more painful."

He added, though, that he doesn't relish the thought of ditching Turner entirely.

"Turner was the first company that signed with us in DBS. It's one of the easy ones to take down, but it's one of the last ones I want to take down because they were the ones who helped us to get into business," he said. "I would bend over backward for Turner. But we have a responsibility to our shareholders not to do stupid deals."

On the earnings front, the satellite TV company posted earnings of $146 million, compared with $315 million in the year-ago quarter. Revenue rose to $3.68 billion from $3.51 billion. The financials missed Wall Street expectations.

Read more Dish Drops CNN, Several Other Turner Networks

Expenses rose from $3.08 billion to $3.29 billion on higher subscriber acquisition advertising, satellite and transmission expenses and programming costs. "The increase in programming costs was driven by rate increases in certain of our programming contracts, including the renewal of certain contracts at higher rates," the company said.

Dish lost 12,000 net pay TV subscribers in the latest period to end September with 14.04 million. In the third quarter of 2013, the company had added 35,000 net subscribers. Cable giant Comcast recorded improved subscriber trends in its third-quarter earnings report.

The satellite TV giant also added about 28,000 net broadband subscribers, down from 75,000 in the year-ago period, to bring its total to about 553,000.

Twitter: @georgszalai