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Management

With or Without Sprint, Dish Chairman Charlie Ergen Wins


Dish Network Chairman and co-founder Charlie Ergen

Photograph by Andrew Harrer/Bloomberg

Dish Network Chairman and co-founder Charlie Ergen

Dish Network (DISH) Chairman Charlie Ergen used to make a living counting cards at blackjack tables. This is not your typical executive, and his 11th-hour, $25.5 billion bid for Sprint (S), announced this morning, may prove particularly strategic.

If Sprint, the country’s third-largest wireless provider, accepts Dish’s bid and SoftBank (9984:JP) declines to match it or beat it, Ergen gets what he wants—the spectrum and customer base of a cell phone giant that he can bundle with Dish’s TV offerings.

On the other hand, if SoftBank manages to win Sprint, Ergen will have forced it to pay more dearly. Meanwhile, Dish can still take a crack at T-Mobile, which is in the process of merging with MetroPCS (PCS), the country’s No. 5 wireless provider. Ergen has been eyeing T-Mobile for some time and recently approached the company about a merger.

Either way, Dish wins: It gets a major wireless provider, and the ability to bundle wireless phone service—and mobile Internet—with its TV products. Doing a little damage to SoftBank in the process? Well, Ergen has a reputation as a ruthless competitor. Under his watch, Dish installed a system that alerts human resources when one of its employees arrives to work late. Tips over 17 percent on an expensed meal are subtracted from a worker’s paycheck. And saying Ergen doesn’t back down easily may be an understatement.

Here’s a telling passage from a January profile in Bloomberg Businessweek:

“I may be the only CEO who likes to go to depositions. You can live in a bubble, and you’re probably not going to get a disease. But you can play in the mud and the dirt, and you’re probably not going to get a disease either, because you get immune to it. You pick your poison, and I think we choose to go play in the mud.”

Regardless, T-Mobile is in a more tenuous position, according to Benedict Evans of Enders Analysis. “Sprint, by itself, is a weak third player,” he says. “But either of its suitors is going to result in a more competitive, more aggressive company, which certainly can’t help T-Mobile.”

Like it or not, SoftBank is in the mud now. T-Mobile is, too.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

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