Steve Mehs
06-16-03, 03:48 AM
Last week's court decision in the distant nets litigation involving EchoStar and broadcasters was welcomed by Wall Street observers of the satellite TV company.
While the court sided with the broadcast plaintiffs in the case, the judge allowed EchoStar to keep parts of its distant nets service along with the ability to offer all of its local TV channels. The ability to keep local TV and some distant nets is a victory for the company, after some suggested that a different decision could have negatively impacted the way EchoStar delivers local TV.
Wall Street analysts agreed it could've been a lot worse for the company.
"EchoStar received the most favorable of the likely scenarios regarding the pending Miami distant local signal litigation," said Marc Nabi of Merrill Lynch. EchoStar's recent stock rise is warranted, Nabi said, "since this ruling - albeit a incremental set-back - is much 'less negative' than the uncertainty of a worst-case scenario."
As a result of the ruling, EchoStar said it must re-qualify distant network customers, which may result in the potential loss of distant network channels for some viewers. EchoStar said less than 10 percent of its customer base would be impacted by the move.
Said Tom Watts of SG Cowen, "While churn could spike in third quarter with mandated customer shut-offs, we believe the outcome is the best that could be expected, and that the 'Death Sentence' sought by broadcasters was successfully averted."
Watts added, "With these issues behind DISH, we expect investors to re-focus on DISH’s rapidly growing free cash flow."
From SkyReport (http://www.skyreport.com) (Used with Permission)
While the court sided with the broadcast plaintiffs in the case, the judge allowed EchoStar to keep parts of its distant nets service along with the ability to offer all of its local TV channels. The ability to keep local TV and some distant nets is a victory for the company, after some suggested that a different decision could have negatively impacted the way EchoStar delivers local TV.
Wall Street analysts agreed it could've been a lot worse for the company.
"EchoStar received the most favorable of the likely scenarios regarding the pending Miami distant local signal litigation," said Marc Nabi of Merrill Lynch. EchoStar's recent stock rise is warranted, Nabi said, "since this ruling - albeit a incremental set-back - is much 'less negative' than the uncertainty of a worst-case scenario."
As a result of the ruling, EchoStar said it must re-qualify distant network customers, which may result in the potential loss of distant network channels for some viewers. EchoStar said less than 10 percent of its customer base would be impacted by the move.
Said Tom Watts of SG Cowen, "While churn could spike in third quarter with mandated customer shut-offs, we believe the outcome is the best that could be expected, and that the 'Death Sentence' sought by broadcasters was successfully averted."
Watts added, "With these issues behind DISH, we expect investors to re-focus on DISH’s rapidly growing free cash flow."
From SkyReport (http://www.skyreport.com) (Used with Permission)