Univision’s Allies Pressure Dish as Channel Blackout Drags On

(Bloomberg) -- For the past three months, Univision has been blacked out on Dish Network Corp., costing the Hispanic media giant more than $200,000 in lost revenue every day.

Now Univision’s allies are mobilizing, trying to pressure the satellite-TV company into restoring the largest Spanish-language broadcaster in the U.S. to its service.

The North Carolina attorney general’s office sent a letter to Dish last week after getting a complaint from a Latino business group. The letter, which was obtained by Bloomberg News, asks whether Dish customers who can’t get Univision are being forced to pay early termination fees when they cancel service. The group also asks if Dish still features Univision in its ads even though the network isn’t available. The Houston Hispanic Chamber of Commerce raised similar concerns in a letter this month to Texas’s attorney general.

Meanwhile, Univision’s stars are encouraging their social-media followers to switch to other TV providers that offer Univision and its sister channels, UniMas and Galavision, saying Dish competitors may pay the financial penalties for viewers who break their contracts.

Other Services

“We have no doubt that if we are unable to find a solution, our audience will migrate to other pay-TV providers,” Univision Chief Executive Officer Vince Sadusky said in a statement.

A Dish spokeswoman said Univision’s logos were accidentally left on its website after the channels were blacked out and have since been removed. Dish is “happy to work with any customers who were impacted,” she said.

Such disputes are not unusual. For years, TV providers like Englewood, Colorado-based Dish have pushed back against fee increases sought by network owners to avoid raising consumers’ bills even more. High pay-TV prices are among the reasons consumers have dropped service for lower-priced options like Netflix.

But it’s rare for a blackout to drag on this long. Univision’s networks have been unavailable to Dish subscribers since June 30. Both companies are suffering losses as a result.

Lose-Lose Scenario?

Dish lost 151,000 TV subscribers in the second quarter. That’s after shedding 94,000 in the first quarter and 429,000 in all of 2017. Univision is the third-most-popular channel on the Dish service, according to the broadcaster, so the satellite-TV company could lose customers at an even faster rate if the Spanish broadcaster doesn’t return.

Univision’s ratings, meanwhile, were down 16 percent in the last TV season, before the blackout began. The company risks losing at least $85 million a year in fees that it got from Dish, according to Geetha Ranganathan, an analyst at Bloomberg Intelligence. The dispute between Univision and Dish affects more than 5.2 million Dish subscribers, including about 1 million in New York and Los Angeles, which have large Hispanic audiences, according to Bloomberg Intelligence.

It’s unclear whether the pressure from Univision’s allies will bring the two companies back to the negotiating table. On an earnings call last month, Dish Chairman Charlie Ergen said the Univision blackout is “probably permanent.” Dish’s profit will increase, he said, because the money saved on Univision programming will over time exceed the lost subscriber revenue.

Monthly Credit

In August, Dish started offering $5-a-month credit to subscribers of Dish’s Latino package, which previously included Univision. Dish also gave away free TV antennas to customers.

“The customers who really want Univision at Dish will find another way to get the product,” Ergen said.

The dispute is one of many challenges facing Univision. The company’s traditional telenovelas are losing popularity and it’s fighting for viewers with Comcast Corp.’s Telemundo and Netflix. The company scrapped an initial public offering in March and its CEO stepped down.

Univision is also paying higher fees to Mexican broadcaster Grupo Televisa SAB for programming and lost Spanish-language World Cup rights to Telemundo. The New York-based company plans to cut more than $100 million in expenses this year and is selling Fusion Media Group, the former Gawker Media websites.

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