Q. I’m a Dish subscriber and I have been without my Fox local sports channel since July. My question is: Will it ever come back, or is it gone forever? — Quinn, Phoenix.
Quinn, on July 26, both Dish and its live streaming service, Sling TV, lost 22 different Fox Sports regional channels (including your Fox Sports Arizona) due to a disagreement over how much they should pay to carry them. (Although the channels carry the Fox name, they are actually owned by Sinclair Broadcasting, which purchased them over the summer.)
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Since the dispute began, Dish Chairman Charlie Ergen has suggested the channels may never return because, in his opinion, Sinclair is asking for excessive fees. Sinclair, however, says its demands are consistent with what other pay TV operators have paid.
There is no indication that the disagreement will end anytime soon, but there is something new.
Earlier this month, Dish reported that Dish and Sling combined for a net gain of 148,000 subscribers in the third quarter, despite the loss of the Fox regional sports channels. The news surprised industry analysts who thought the two services would lose a significant number of sports fans during the quarter.
The addition undoubtedly eases the pressure on Dish to make a deal with Sinclair. That could be good news if Sinclair acknowledges that reality and lowers its fees. But it could be bad news if Sinclair holds firm and Dish feels even more confident about not making a deal. At this point, we don’t know how it’s playing out because the negotiations are conducted behind closed doors.
Dish’s negotiating stance has also been strengthened because the company is now saving an enormous amount of money by not paying Sinclair those carriage fees. Wall Street analyst Rich Greenfield estimates the annual savings could come to $500 million, assuming the channels remain off the air for an entire year.
In a conference call held on November 7 with financial analysts, Ergen acknowledged the savings, but added that he still wants a deal with Sinclair.
“We like Sinclair. We’ve had a long-term relationship with Sinclair. We like the company. We like the people there. We’d rather have regional sports, but we’re not going to — as a company, we’re not going to subsidize. We’re not going to subsidize regional sports. And so there is economics that may not work for them, but there is economics. We know what the economics are for us,” Ergen said, according to The Motley Fool.
So, bottom line: Dish (and Sling) appear to be in no hurry to strike a new agreement with Sinclair. The big question now is if that will pressure Sinclair to relax its demands and offer terms acceptable to the nation’s second largest satellite operator.
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