By Shalini Ramachandran
Dish Network Corp. said Chief Executive Joe Clayton will retire
at the end of March and will be succeeded by Chairman Charlie
Ergen, who will take the helm as the satellite-TV company is
pushing to diversify into new lines of business.
Mr. Ergen, the company's mercurial, 61-year-old founder, stepped
away from the CEO role nearly four years ago. As chairman he helped
game out Dish's major strategic moves, including investments to
enter the wireless business and a recent plunge into streaming
TV.
Now, as he assumes day-to-day control once again, Mr. Ergen
faces the challenge of capitalizing on those bold bets by finding
revenue growth that can counterbalance stagnation in Dish's core
pay-TV business. Dish reported Monday that it lost 79,000
subscribers last year, with 63,000 shed in the fourth quarter as it
battled major TV programmers in carriage fee disputes.
By some measures, the U.S. wireless industry is already mature:
The number of U.S. wireless subscriber connections, including
cellphones and tablets, amounts to more than the entire U.S.
population, according to CTIA, the wireless industry trade
association.
But in an interview, Mr. Ergen said he views the industry as
"relatively in its infancy" and sees a world of wireless-enabled
devices beyond tablets and smartphones, from refrigerators to cars
to smartwatches that will "lead to tremendous growth."
Mr. Ergen estimated the number of devices supported by the U.S.
wireless industry will jump from some 340 million today to tens of
billions in the next 10 years. "Some people in the [wireless
industry] today run the business as a mature business, but behind
the scenes they clearly see that this thing has got another 50
years to go," he said.
Dish's road to enter the wireless business has been bumpy. The
company won a surprisingly large number of wireless licenses in a
recent government auction, but is facing criticism from major
wireless carriers and some government officials for setting up
bidding vehicles in a way that allowed it to secure $3.3 billion in
discounts intended for small businesses.
Mr. Ergen brushed off those criticisms. "We basically played by
the rules and bid economically for the auction," he said, adding
that Dish will further comment "at the appropriate time."
While it has amassed spectrum--the frequencies that carry
wireless transmissions--Dish still doesn't have the cellular
network it needs to offer service to customers. Its attempts to
court partners or buy other wireless carriers like Sprint Corp.
over the past few years have largely been unsuccessful.
Mr. Ergen said early results show that Sling TV, Dish's
$20-a-month Web video service, which launched commercially earlier
this month, is attracting customers who aren't subscribing to pay
TV today.
We "know that millions of people every year are cutting the
cord," Mr. Ergen said. "You're better off with half of a loaf--$20
a month--than you are with getting nothing out of that
customer."
Mr. Clayton, 65, will step down and leave Dish's board on March
31. Mr. Ergen said he has learned from the outgoing CEO about
interacting with employees and "making hard decisions where not
everybody in the room wins." Mr. Ergen long had a reputation for
micromanaging subordinates, which helped create a tough workplace
culture at Dish.
"I think I am going to be a better CEO than I was before, and
part of that will be some of the things I learned from Joe," Mr.
Ergen said. "I never had a mentor, myself."
Mr. Clayton was behind the launch of Dish's controversial Hopper
digital video recorder and automatic ad-skipping feature, a
technology that triggered lawsuits by major broadcasters. It is the
"best product we've ever done," Mr. Ergen said.
Mr. Ergen also credited Mr. Clayton for helping to lay the
groundwork for Sling TV and for grooming a crop of young leaders
inside the company who have "the ability to take on full
responsibility" in the future.
As the company's wireless and online video initiatives "become
bigger parts of the business" Mr. Ergen said he would consider
whether someone else is better for the CEO job.
"I'm not afraid to fire myself again," he said.
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