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Does Dish Network Have Too Much Debt?

Dish Network Picture Quality
Dish Network HD satellite dish (DISH 1000+) with a western arc LNB.

Dish Network is in the midst of some big changes. The company, whose core business of satellite TV is declining, has been pivoting of late to 5G service.

Just this week, Dish announced that it had selected NEXSYS-ONE to manage its nationwide 5G network build.

“We selected NEXSYS-ONE to support our network buildout because it’s the only platform available that ties project management, financial controls and inventory planning into one seamless, integrated solution,” Dave Mayo, EVP of Network Deployment, DISH Wireless, said in the announcement. “This management tool allows our teams to maintain the organization, control and coordination needed to efficiently deploy our nationwide 5G network at a record-breaking pace.”

This followed a deal Dish announced, back in July, with AT&T, to make AT&T Dish’s wireless network provider.

However, there is some concern raised about Dish, in a piece today on nasdaq.com.

According to a graph published on the site, Dish had $16.1 billion in debt as of June, compared to $4.83 billion in cash.

“We can see from the most recent balance sheet that DISH Network had liabilities of US$4.04b falling due within a year, and liabilities of US$20.9b due beyond that,” the site said.

“Offsetting these obligations, it had cash of US$4.83b as well as receivables valued at US$977.3m due within 12 months. So it has liabilities totalling US$19.1b more than its cash and near-term receivables, combined… This deficit is considerable relative to its very significant market capitalization of US$22.8b, so it does suggest shareholders should keep an eye on DISH Network’s use of debt. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution.”

The site also looked at Dish’s net debt compared to EBITDA.

“DISH Network’s net debt is 2.6 times its EBITDA, which is a significant but still reasonable amount of leverage,” the site said. “But its EBIT was about 1k times its interest expense, implying the company isn’t really paying a high cost to maintain that level of debt. Even were the low cost to prove unsustainable, that is a good sign. Importantly, DISH Network grew its EBIT by 68% over the last twelve months, and that growth will make it easier to handle its debt.”

In the second quarter of 2021, Dish Network lost 132,000 pay-TV subscribers, bringing it to a total of 8.55 million, per Leitchman Research Group. The same quarter Sling TV, the company’s vMVPD service, gained 65,000 subscribers, giving it a total of about 2.4 million. Dish has the second-most subscribers in the “other traditional services” category, as measured by Leitchman, while Sling TV has the second-most in the vMVPD category.

Stephen Silver is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Written By

Stephen Silver is a journalist, essayist, and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review, and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

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