pax going off directv this month

OK, here is how I see it...

Debt, the company must show increased earnings to pay down billions of $ of debt. To do this they will have to reduce promotions (unlikely) or raise rates (likely). If the kill promotions, people won't leave cable to come to DBS, if they don't raise rates, then how do the justify eliminating competition. I'm not talking raising them much. Couple of dollars, leaving the lower packages untouched.

OK, so they raise rates or cut promotions (either one will happen) to increase revenue, which makes the investors happy, how do they keep the growth that the currently have? Churn will go up and people will move back and forth between cable and DBS. That isn't good for Echostar since they have to use promotions to lure people back, reducing their earnings. Or they cut their rates and reducing earnings. Either way investors will want to see a return on investment since they loaned billions of dollars to the company. How does Echostar "pay back" the investors? Increase their stock price. How do they increase their stock price? Increased revenue or profit. The only way to leverage their monopolistic power over DBS is to increase rates. That would validate investing in DBS since they will still be cheaper than cable in most cases, keeping subs and attracting new ones, but still having increased revenue. Promotions, while they might get less prevalent, will still be needed to encourage subs to invest in PVRs and HDTV which in turn would keep them from leaving since they have invested hundreds of dollars in equipment. If subs don't leave, then the increased revenue would help the bottom line, increasing the stock price and making the investors happy.

It wouldn't take a huge increase since there would be what, 20 million dbs subscribers? So a $3 increase to 75% of the highest paying subs would be $45 million. Not a bad way to increase revenue.

Now look, I'm just looking at this from an economics standpoint. I don't know enough about what Echostar's plans are, so I could be talking out of my a**. The point is that its not about Charlie anymore, its about the investors who aren't going to wait 3-4 years to see a ROI (return on investment). The market is down and investors patience is poor. All they want to see is a good ROI, not that there were 5 million new subs this year. Unless those 5 million subs increase revenue this year (which is unlikely since they were lured with promotions), most investors would look down on that. What they want to see is the combined company having increased revenue without increased expenses. If Echostar can do that, they have nothing to worry about.