In early 2015, Charles Ergen was the richest person in Colorado and the 24th richest in the United States. Some 14 million households got their TV from his Dish Network, which had recently hit an all-time high market capitalization of nearly $37 billion. His second business, EchoStar, was profiting off Dish’s success, providing most of the satellite technology for its broadcasts. Ergen, who owned sizable chunks of both publicly traded companies, had a fortune of $20.1 billion.
Then came the streaming wars. As customers flock to on-demand, internet-based options like Netflix and Hulu, Dish TV’s subscriber base has fallen to 6.7 million, down from a peak of 14.1 million in 2010. Dish has lost 900,000 customers in the past year alone. Shareholders have jumped ship, pushing the stock from $70.83 per share nine years ago to $4.88 now, a 93% drop, including a 65% freefall in 2023. Meanwhile, EchoStar brought in $1.8 billion in revenue over the 12 months through September, almost half the $3.4 billion it generated nine years ago. Not surprisingly, Ergen’s net worth—which remains largely tied up in the two businesses—has cratered, falling a stunning 94% since 2015, despite the S&P 500 gaining 125% in value over the same period. His fortune slipped below $800 million in November, when he briefly fell from the billionaire ranks for the first time since 1998.
Now Ergen, a former professional poker player, is betting he can reverse his fortunes with a full business overhaul: merging EchoStar and Dish, and transforming the business from pay TV into a 5G wireless network operator. His gamble rests on a groundbreaking but little-tested technology and a deal that will bring in much-needed cash to triage Dish’s loan-littered balance sheet, which totals $21 billion in debt, $3 billion of it due next year. “He needed to make bold moves,” says Roy Chua, founder and principal at AvidThink.
Announced in August, the FCC approved the merger on Dec. 6, sending the stock soaring 31% from its $3.32 low and helping push Ergen back to the billionaire ranks; he’s currently worth $1.3 billion. The transaction is expected to close by the end of the month. Investors are encouraged that Dish will now be able to pay off at least the first of its massive debts next year, though analysts remain skeptical about the business’ long-term health, especially because debts could keep mounting and the business needs to raise billions more in capital. It’s not the first time Ergen has faced tough odds—or come up with a long shot plan to claw his way out.
Born in Tennessee in 1953 to a former Manhattan Project physicist, Ergen took charge of his finances at age 18, when his father died, scraping together the funds for tuition at the University of Tennessee-Knoxville from odd jobs and poker winnings. After graduation, he got an MBA at Wake Forest and worked for a few years as an auditor and then financial analyst before deciding he wasn’t cut out to be a corporate employee.
In 1980, he joined the burgeoning satellite TV industry, founding EchoStar (originally called Echosphere) with his future wife, Cantey McAdam, and his friend Jim DeFranco, who together sold satellite dishes out of the back of a truck. As the trio crossed a Colorado highway to install their first system, Ergen—driving too fast—watched himself lose half of his inventory in seconds as a gust of wind blew off the dish they were towing.
After a few years installing dishes to customers across the rural Mountain West, he decided to try sending satellites to space so he could offer his own broadcasting services. With junk bonds and a $63 million IPO, his team put together enough money by the end of 1995 to launch their first satellite—using a rocket from China Great Wall Industry Corp. that had a 50% failure rate. Ergen later said that the company might have immediately crumbled if that launch hadn’t worked. So began Dish Network, then an entity under EchoStar.
Within two years, EchoStar had over 1 million customers and was adding subscribers six times as fast as its larger competitor DirecTV. It was enough to place Ergen among the nation’s wealthiest people. In 1997, he first appeared on The Forbes 400, worth an estimated $500 million. That same year, he made headlines for an infamous blowout with News Corp.’s Rupert Murdoch, who agreed to merge satellite TV assets but pulled out of the deal, leaving EchoStar for dead. Ergen, furious, sued for breach of contract. It ended in embarrassment for Murdoch, who failed to find alternative satellite partners and shuffled back to EchoStar, accepting a worse deal than he’d had in the first place. (The two continued to face off for years as competitors; Murdoch acquired DirecTV a year after Ergen’s bid for it failed.)
Along the way, Ergen developed a reputation for frugality, including asking early EchoStar executives to share hotel rooms—something he also did—and book red-eye flights whenever possible. In the 1990s, he bought himself a lifetime pass on United Airlines giving him the best-available seat on any domestic flight for the rest of his life, a decision that saved the company “millions of dollars,” says Dish spokesperson Ted Wietecha.
Ergen isn’t known for making flashy purchases, though he has spent at least $65 million since the late 1980s gradually buying up some 14,400 acres of ranch land in southwestern Colorado that are now worth an estimated $120 million.
In 2008, Ergen spun out Dish into a separate company, which became the main business, saying the separation would help fund expansion and allow each entity to specialize (Dish on pay TV; EchoStar on satellite technology).
As Dish’s star rose, Ergen also made some enemies, earning himself the title of “the most hated man in Hollywood” by The Hollywood Reporter and Dish as “worst company to work for” multiple times by 24/7 Wall St in the early 2010s. “Of course Hollywood hated Charlie,” spokesperson Wietecha responds, because Ergen introduced ad-skipping technology at the time that angered broadcasters: “That fight is just another example of Dish innovating on behalf of consumers.”
It wasn’t just Hollywood. A steady stream of lawsuits from other companies, customers and employees has accused Ergen and his companies of patent violations, destruction of documents, copyright infringement, sexual and disability discrimination and other offenses over the years. Once he was accused of using money from his daughter’s trust fund (without telling his wife) to illegally buy another company’s debt. Judges have condemned Ergen and his companies, with one criticizing their “sustained and ingrained practice of violating the law” and another saying their conduct in court “doesn’t even meet law school student behavior.”
Asked to comment on the lawsuits, Dish spokesperson said the company has generally prevailed in litigation. “Like most large companies that have been in business for decades, there are a number of legal proceedings one can point to or call out,” says the spokesperson. “It’s easy to cherry pick from them to paint whatever false narrative you want.”
Ergen has also repeatedly angered the FCC for using shadowy maneuvers in auctions and failing to meet some of Dish’s licensing deadlines.
“I don’t think you could say this was ‘a once-great business,’” says Craig Moffett, senior managing director of MoffettNathanson. “You really have to go through Dish’s history and try to find something laudatory, and it’s not easy.”
To his credit, Ergen saw his industry’s decline coming and tried to create new lifelines. He bought the bankrupt Blockbuster for $320 million in 2011, hoping to use its library to create a Netflix competitor and its stores to sell a future wireless service, but neither has happened (he’s said he was too late for the first goal and too early for the second). He launched the first-ever live TV streaming service, Sling TV, in 2015. Its growth quickly stalled, though, amid competition from the likes of YouTube TV and Hulu Live.
One former Dish executive blames a “revolving door” of leadership at the company for Sling’s troubles. In the decade through 2022, 24 people rotated through the company’s executive officer team (which ranged in size from 7 to 14); three stayed less than a year. (“Accounting for executives who have retired, attrition has been at or below industry averages,” claims the Dish spokesperson.) It hasn’t helped that Dish executives’ stock options—in which they’re heavily compensated—haven’t been worth much in years, given the cratering share price.
“Why would you stay if you can see the trajectory of the stock?” the former executive says. “Charlie was incredibly smart, a visionary. He could actually see around corners. I think that his problem is probably his stubbornness. He’s probably lost money in value by not wanting to pay people, and having to start all over at key executive positions.”
Now, Ergen thinks he’s found another lifeboat: 5G. Since 2008, he has been cryptically acquiring licenses for spectrum, the bands of radio frequencies over which wireless communications travel and which are regulated by the FCC. By 2020, he was sitting on an enormous portfolio of licenses that were about to expire before he could use them.
That’s when he received his latest 11th-hour reprieve, from an antitrust investigation: The FCC was debating whether to allow a merger between two of the four major U.S. cell phone carriers, T-Mobile and Sprint. Rather than prohibit the move, the commission devised the unusual plan of helping a new operator gain the resources to replace Sprint as the fourth player in the market. Dish, with its mountain of valuable spectrum, was the only company that could fill the role.
So T-Mobile and Sprint were allowed to join forces, and Dish received spectrum license extensions as well as Sprint’s prepaid wireless business, under the condition that Dish develop a postpaid business while building its own 5G network at record speed.
Ergen admits that rushing to meet the FCC’s deadlines has meant that the Dish team has had to move “ahead of our skis,” as he said on Dish’s most recent earnings call. “We’re making a few more mistakes than we probably normally would like to make,” he said. They initially had problems integrating the pieces of the network, and analysts say they’ve done a poor job of marketing both it and Boost Infinite, Dish’s new postpaid wireless service. Boost Infinite’s initial numbers are not encouraging: Dish lost 225,000 customers in the last quarter between prepaid and postpaid.
What’s more, telecommunications is an extremely capital-intensive industry, so Ergen has needed to sink billions into his network long before seeing a penny back. Despite having $3 billion in debt coming due next year, and $21 billion in total debt, Dish has only $3 billion in current assets. The company reported a net loss of $139 million last quarter, and it has a leverage ratio of nearly 11 times EBITDA, well above the two or three times average for telecom companies, per an analysis by research outfit MoffettNathanson.
“Realistically, there’s just no way to finance the business anymore,” says the firm’s Craig Moffett. “It seems like this business is destined for bankruptcy. It’s just a matter of when.”
Analysts believe that’s why Ergen decided in August to re-merge Dish and EchoStar. The move will allow him to use the latter’s positive net cash position ($2.5 billion in current assets against $1.5 billion in debt) to pay down at least the first of Dish’s loans, giving him some breathing room. The FCC has approved the merger, which is expected to close by the end of this month and will designate EchoStar as the main company and Dish as a subsidiary.
Ergen is so far a “survivor,” Moffett acknowledges, in that he has many times skirted catastrophe. “Yes, he’s lived to fight another day, but each time minus one more limb, to the point that now he’s kind of the Black Knight in the Monty Python movies.” In a Holy Grail skit, that knight is butchered until he’s a bleeding, limbless torso—who blusters about a fight he has no chance of winning.
Ergen has to continue to compete against established giants like T-Mobile, AT&T and Verizon in postpaid wireless, at least for now, to meet the FCC’s requirements. But the way he tells it, the real way out of this mess is his cutting-edge 5G software. He’s creating the United States’ first-ever “open radio access network,” or O-RAN, which is cloud-native and meant to be cheaper than other wireless networks and provide more speed, reliability and options for consumers. O-RAN is expected to be useful for private 5G networks, particularly in campus-style workplaces. Verizon, AT&T and T-Mobile are also starting to compete for this nascent “enterprise” market, but they don’t have Dish’s O-RAN capabilities.
“I think that that’s where ultimately the game will be won and lost for us,” Ergen said on the recent earnings call.
O-RAN is still young and some experts caution that it may be more expensive than hoped and bring security risks. So far the market for private 5G applications has been slower to emerge than predicted, in part because in-person employment cratered during the pandemic and has been slow to recover.
“Private 5G networks could be a meaningful revenue line for Verizon by ’25,” says Ric Prentiss, head of telecommunications research at Raymond James. “Now, if you’re Dish, ’25 seems like an eternity away right now.”
It might seem pretty far for Dish’s biggest shareholder, Ergen, as well, who has watched nearly $20 billion in personal wealth disappear over the past decade as the former gambler has moved from one turnaround plan to the next in search of the perfect bet to win back his losses.
“You never know with Charlie,” says AvidThink’s Roy Chua. “As it’s been proven year after year time and time again, you never count him out. Ever.”
By Monica Hunter-Hart, Contributor
