Dish Network Corp., the second-largest U.S. satellite-television provider, may continue its acquisition spree as Chairman Charles Ergen turns over duties as chief executive officer and president to Joseph Clayton.
Ergen will focus on Dish’s overall strategy while Clayton controls the day-to-day operations of the company. Clayton, 61, who was chairman of Sirius Satellite Radio Inc. from November 2004 through July 2008, was also appointed to the board, Dish said in a statement yesterday.
Ergen and Clayton have discussed strategies already, some involving additional acquisitions though there isn’t a set plan, Clayton said. Dish, based in Englewood, Colorado, acquired Blockbuster Inc.’s movie-rental business and DBSD North America Inc. this year to reposition the company against rivals such as DirecTV, the largest U.S. satellite-TV company. Ergen will work on integrating recent acquisitions while potentially making “a few more,” said Clayton.
“I believe that Charlie Ergen is probably talking to several people, entities, and you’ll see where it goes,” Clayton said in an interview yesterday. “Watch carefully how the ones that he’s already acquired fit into the total long-term strategy.”
Dish rose 9 cents to $28.90 yesterday in Nasdaq Stock Market trading. The shares have gained 47 percent this year before today.
Clayton served as CEO of New York-based Sirius from 2001 to 2004 and was president and CEO of Frontier Corp. from 1997 to 1999.
Ergen, 58, was responsible for spinning off the EchoStar unit, which sells set-top boxes and satellite service, in 2008 to increase the value of Dish and fund expansion. He had been CEO of the older, combined company, which he helped found, since 1980.
Ergen, who still serves as chairman of EchoStar, has also bought assets this year including Move Networks Inc., which makes technology to stream online video faster, and Hughes Communications Inc., which provides satellite broadband. Branding Ergen’s assets as a total package with the Dish Network name is a primary goal, Clayton said.
“I really believe we need to make Dish a household word more than it is today,” said Clayton. “I’ve done that with Sirius. Hey, four or five years ago, no one had ever heard of Sirius.”
Dish on May 2 reported first-quarter profit that topped analysts’ estimates. Net income reached $1.22 a share while analysts had projected 68 cents in a Bloomberg survey. Dish doubled its bond offering the same day after reporting it settled a patent lawsuit with Alviso, California-based TiVo for $500 million. The settlement allows Dish and EchoStar to proceed with DVR distribution and manufacturing.
“We are investing in technology, we’ll be investing in our distribution, we’ll be investing in our brand and we’ll be looking for other possible companies that have capabilities that we can add to ours,” Clayton said.
Companies worldwide have proposed more than $840 billion in mergers and acquisitions so far in 2011, on schedule for at least $2.45 trillion this year. That would be a 10 percent increase over the $2.3 trillion in deals last year.