A high-ranking Dish programming executive warned that a Time Warner-AT&T merger could spell doom for the skinny bundle. The Hollywood Reporter’s THR, Esq. reports that Warren Schlichting testified against the $85 billion merger as the trial in the government’s attempt to halt the deal began its second week.
“Guided by a Justice Department lawyer, Schlichting began talking about the ‘must-haves” in the television business and those programmers who are less important,” THR reports. “ABC, NBC, Fox, CBS, and, of course, Time Warner, made the cut, but not Viacom because as the exec put it, the company tries to sell 27 channels to distributors after having not invested enough in its product. (Schlichting acknowledged that Viacom’s new leadership is trying to change the situation.) Those who are on the important end, said Schlichting, are there because of live sports rights, or in the case of Time Warner’s CNN, because everyone is paying attention to politics right now. In a world of DVRs and Netflix binge watching, that’s why a lot of people haven’t totally cut the cord.”
Schlichting suggested that a merger would put his company’s Sling service, a so-called “skinny bundle,” at risk. He also mentioned what THR describes as “the contentious negotiations with Turner in late 2014 that briefly caused CNN to go dark on Dish platforms.”
“These negotiations are tough,” said Schlichting. “That’s so even without the merger. Turner has a good negotiating team. With the merger, all the incentives change, and we have one of our most important licensors teaming up with our biggest adversary. I just don’t know what incentive Time Warner would have to get a deal done.”
THR adds: “By adversary, he’s talking about DirecTV, which is owned by AT&T. Schlichting’s point is that if AT&T’s Time Warner can’t get to a deal with Dish, at least AT&T would know that it might get Dish customers to defect to DirecTV.”
Said Schlichting: “DirecTV has a national service. It is more lucrative to take subscribers than to collect programming fees. … In a typical programming negotiation, they will say they want every one of their networks distributed broadly with a rate hike per subscriber. This time [after the merger], I just don’t see them having any motivation to move [off such demands].”
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