Charlie Ergen

Charlie Ergen
Born	Charles William Ergen (1953-03-01) 1 March 1953 Oak, Ridge, TN
Nationality	United States
Occupation	Chairman of Dish Network
Known for	Co-founder of Satellite provider Dish Network
Net worth	US$12.3 billion (February 2016)[1]
Religion	Episcopalian
Spouse(s)	Cantey McAdam
Children	Five
Parent(s)	Viola Siebenthal Ergen William Krasny Ergen

Charles William "Charlie" Ergen (born March 1, 1953) is an American businessman and is the co-founder and current Chairman of the Board, and former President and CEO of Dish Network and EchoStar Communications Corporation. He stepped down as CEO in May 2011 in favor of Joseph Clayton. He remains Chairman of the Board of both companies. Ergen resumed as CEO upon Clayton's March 31, 2015 retirement. Ergen owns 52 percent of Dish and Echostar shares and holds 88 percent of its total voting power.^{[1][2][3][4][5][6]}

Early life and education

Ergen was born into an Episcopalian family^[7] in Oak Ridge, Tennessee, on March 1, 1953,^[6] the fourth of five children born to Viola (née Siebenthal) and William Krasny Ergen.^[8][9] His mother was one of the first female accountants in the state of Minnesota^[7] and his father was an Austrian immigrant who was working in Sweden as a nuclear physicist who left Europe prior to World War II.^[8] His father coined the phrase "China Syndrome".^[8] His parents married in Minnesota in 1944 and then moved to Camden, New Jersey, before settling in Oak Ridge where his father accepted a position at the Oak Ridge National Laboratory.^[7] Ergen received a Bachelor of Arts from the University of Tennessee at Knoxville,^[10] and an M.B.A. from Wake Forest University.^{[1][3][5][6][11]} He was a professional blackjack and poker player.^[4][10][12] Ergen studied finance at the University of Tennessee, became a CPA, and worked for Frito-Lay before striking out on his own.^[13]

Career

In 1980, he founded EchoStar with his wife and his friend Jim DeFranco.^[1][4][13] He started selling satellite dishes door to door in Colorado.^[14] Both Ergen's wife and DeFranco still sit on EchoStar's eight-member board.^[4]

EchoStar

In 1980, Ergen and a friend were kicked out of a casino in Lake Tahoe, Nevada after Ergen's friend was caught mouthing the numbers of cards as they were dealt.^[15]

Ergen, his future wife Cantey, and De Franco started a new business called EchoSphere Corporation investing $60,000. They purchased two C-Band antennas and targeted rural Colorado. They drove around Denver on a small budget, selling satellite dishes from the back of their truck.^[16]

In 1990, Ergen pushed EchoStar into the big leagues by raising $335 million in junk bonds and purchasing orbital slots for satellites. Two years later, EchoStar got a DBS license from the Federal Communications Commission, giving the company its own geostationary orbital slot. In 1993, EchoStar Communications was incorporated. Under Ergen, EchoStar’s net income doubled to $20.4 million, in 1993.^[16]

DISH

Ergen officially rolled out Digital Sky Highway (DISH) service in the spring of 1996. DISH was competing directly with DirecTV, Primestar and United States Satellite Broadcasting. It initially offered five programming packages, with monthly fee ranging from $19.99 to $59.99. In August 1996, Dish Network had 100,000 subscribers. After the launch of EchoStar II in September 1996, DISH Network had 350,000 extra subscribers by the end of the year.^[16]

Under Ergen, EchoStar and DISH acquired multiple companies, after an $8 million deal for 22 channel assignments of DBSC.^[17][18]

• EchoStar purchased a 40% stake in Direct Broadcast Satellite Corporation (DBSC) in 1994, and the remaining 60% two years later.^[19]
• In 1998, EchoStar reached a deal with Rupert Murdoch’s News Corp to buy the DBS assets of American Sky Broadcasting and MCI Worldcom-News Corp. venture satellite television assets for $1.25 billion. This would increase EchoStar’s channels from 200 to 500, and give News Corp and MCI 37 percent interest in EchoStar. However, the deal fell apart at the last minute.^[20]
• In 2007, EchoStar acquired Sling Media Inc, a provider of over-the-top video solutions, for $380 million USD.^[21]
• In 2011, DISH and EchoStar completed several acquisitions:
• EchoStar bought out Hughes Communications Inc. for an estimated $1.32 billion.^[17]
• DISH acquired struggling DBSD North America in a $1 billion deal to enhance its existing wireless spectrum.^[22]
• DISH bought bankrupt video rental chain Blockbuster LLC in a deal valued at an estimated $228 million.^[23]
• DISH bought TerreStar for $1.38 billion in a bid to add the latter’s mobile wireless spectrum to its portfolio.^[24]

Sales and marketing tactics

Ergen initially relied on price undercutting and promotional offers. In 1998, DISH included BBC America in its America’s Top 100 CD package. Ergen is also known for giving away free satellite dishes.^[16][25]

FEC investigation

Ergen makes large and frequent donations to the Democratic Party. In the 2014 election cycle Ergen gave almost exclusively to Democratic candidates such as Kay Hagen, Mark Pryor, and Mark Begich. In 2012, a complaint against Ergen was filed with the Federal Elections Commission (FEC). The complaint alleged that Ergen intimidated Dish Network employees into making contributions to specific candidates, almost all of whom were Democrats. According to the complaint, Ergen told Dish Network's Chief Operating Officer Bernard Han that if he did not donate to a particular Democratic candidate in the 2010 election cycle he would still have a job but would suffer consequences. The complaint says other employees were treated in a similar fashion.^[26]

Litigation

Harbinger

Harbinger Capital Partners, a hedge fund managed by Philip Falcone, sued Dish Network and Charles Ergen personally for illegally attempting to strip it of control of LightSquared during its bankruptcy. The suit seeks treble damages for $1.5 billion in alleged losses. Civil violations of the federal Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO, are alleged.^[27]

Shareholder rights

The Iron Workers Mid-South Pension Fund filed suit against Ergen in federal court in Colorado in September of 2013. Ergen bought large amounts of LightSquared's debt at deep discounts while it was in bankruptcy. Ergen then made a personal bid of $2 billion to acquire LightSquared's assets. This increased the price that Dish had to bid in order to acquire LightSquared's rights to wireless spectrum. Indeed, Ergen ordered Dish to bid $2.2 billion on these assets. The suit claims this was a breach of Ergen's fiduciary duties to Dish shareholders.^[28]

Awards

In June 1991, Ergen was named ‘Master Entrepreneur of the Year’ for the Rocky Mountain region by INC Magazine. Two years prior, he had been honoured with a Home Satellite TV Association Star Award. Ergen played a key role in fighting for American consumers’ rights to watch local television channels via satellite, which became a reality after the Satellite Home Viewer Improvement Act was passed in 1999. He has been an advocate of video competition issues and testified before the Congress, in this regard, on numerous occasions. He was recognized with a Rocky Mountain News’ Business Person of the Year Award in 1996, and honoured a second time in 2001.^[29][30]

Ergen also won the Frost & Sullivan 2001 CEO of the Year of the Satellite Industry. In 2000 he was named ‘Space Industry Business Man of the Year.’ Ergen was named one of the ‘World’s Best CEOs’ by Barron’s magazine in 2007. He was also mentioned in Forbes Magazine ‘Top Ten CEOs’ list. Ergen has also been the co-founder of the Satellite Broadcasting and Communications Association.^[29][30]

Working style

CNN described Ergen as having the “classic startup mindset.” He is known to be an aggressive and fierce entrepreneur with a country-boy image that belies his competitive nature. Ergen highly thinks that sports are “a great preparation for being a billion-dollar company competing against hundred-billion-dollar companies. You learned to step on their foot so they couldn't jump." Ergen is also known to take employees and interns on hiking trips every year.^[13]

Ergen is perceived as being difficult and unpredictable in negotiations. AT&T attempted to acquire Dish only to have the deal fall apart at the last minute. In 2013, Ergen angered his counterparts in negotiations to acquire Sprint by making a direct bid for Sprint's Clearwire subsidiary. Dish later walked out of those negotiations. Ergen's supporters call his negotiating style patient and prudent.^[31]

Ergen is well-known for his frugality. His office is furnished with second-hand couches and he does not fly first class.^[32]

Innovation and disruption

Under Ergen, DISH was the first satellite provider to offer two-way high-speed internet access and the first to introduce a Digital video recorder in a set-top box. He was also instrumental in making satellite receivers available for under $200. In 2012, the Big Four Broadcasters, NBC, CBS, ABC and Fox filed a suit against Dish Network after it launched AutoHop, a technology that records broadcasting programming and plays it back without commercials. DISH filed a suit seeking a declaratory judgment asserting the legality of the judgment. Preliminary injunction by Fox to block the service was denied. Ergen has stated that DISH’s present focus is on acquiring a significant share of the spectrum for cellular wireless services. Dish is also looking for a partner to build a wireless network, with Google and AT&T speculated to be potential partners.^[25][33][34]

Personal life

He is married to Cantey ("Candy") McAdam. They have five children.^[1] They live in Littleton, Colorado.^[1][6] Ergen is an avid mountain climber who has scaled Mount Kilimanjaro, Mount Aconcagua in Argentina and Mount Everest base camp in Nepal. He is a member of the Colorado Mountain Club and has climbed all of Colorado’s 14,000-foot peaks. Besides mountain climbing, his interests include poker and pickup basketball.^[6][35]

References