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Dish Network CEO Joe Clayton Stepping Down As Subscribers Fall

02/23/2015 07:10 am ET | Updated Apr 25, 2015
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(Adds chief executive quotes, updates stock price)

By Anya George Tharakan and Malathi Nayak

Feb 23 (Reuters) - Co-founder and Chairman Charlie Ergen will return to the helm of Dish Network Corp, which is struggling to stanch subscriber losses, when the incumbent chief executive steps down next month.

Joe Clayton, 65, who has been CEO of the second-biggest U.S. satellite TV company since 2011 when Ergen relinquished the post, will retire on March 31. (http://reut.rs/1zz8TQq)

"With Joe leaving, I thought it was a good chance to get back to the day-to-day operations ... hopefully we can make some improvements," Ergen, 61, said on a conference call to discuss the company's results.

Dish has amassed troves of U.S. wireless spectrum and made a recent foray into streaming TV in a bid to offset the loss of pay-TV subscribers.

In a record-setting AWS-3 wireless spectrum auction in the United States that closed last month, Dish did not win any licenses but invested in bidding partners SNR Wireless LicenseCo LLC and Northstar Wireless LLC, which bid a hefty $13.3 billion to lap up airwaves in prime geographic locations such as New York and Chicago.

Asked by an analyst whether Dish would consider buying spectrum from Sprint, Ergen said: "If we could afford it, certainly."

The company reported quarterly revenue on Monday that fell short of estimates as it lost more about 63,000 pay-TV subscribers in the fourth quarter ended Dec. 31, almost double the number forecast by market research firm StreetAccount.

This was partly due to the absence of channels from Twenty-First Century Fox Inc from Dish's service, following a dispute between the two companies that was resolved in January.

"Dish hasn't grown its subscriber base in six years and in most businesses, falling subscribership means falling margins as well," said Craig Moffett, an analyst at MoffettNathanson. "But today's results were better on margins."

He attributed that partly to lower programming costs while certain shows were off the air.

The 2014 churn rate, or user defections to other networks, was 1.59 percent, from 1.58 percent a year earlier.

Net income rose to $409.9 million, or 88 cents per share, from $288 million, or 63 cents, a year earlier. (http://1.usa.gov/1A0lX08) Revenue rose 4 percent to $3.68 billion, against analysts' expectations of $3.7 billion.

Dish's recent spectrum auction bid is under review as U.S. regulators will examine a $3 billion discount claimed by the company and its partners.

Shares were little changed at $78.26 on Monday. (Reporting by Malathi Nayak in New York, Anya George Tharakan and Lehar Maan in Bengaluru; Editing by Saumyadeb Chakrabarty, W Simon and Bernadette Baum)

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