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$16.7 billion (October 2016)[1]
Religion	Episcopalian
Spouse(s)	Cantey McAdam
Children	Five (Christopher[2])
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][3][4][5][6][7]}

With an estimated 2014 net worth of $17B, Ergen is reportedly the wealthiest person in Colorado.^[8]

EchoStar

Ergen, his future wife Cantey, and James 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.^[9]

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.^[9]

DISH

Under Ergen, EchoStar and DISH acquired multiple companies, after an $8 million deal for 22 channel assignments of DBSC.^[10][11]

• EchoStar purchased a 40% stake in Direct Broadcast Satellite Corporation (DBSC) in 1994, and the remaining 60% two years later.^[12]
• 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.^[13]
• In 2007, EchoStar acquired Sling Media Inc, a provider of over-the-top video solutions, for $380 million USD.^[14]
• In 2011, DISH and EchoStar completed several acquisitions:
• EchoStar bought out Hughes Communications Inc. for an estimated $1.32 billion.^[10]
• DISH acquired struggling DBSD North America in a $1 billion deal to enhance its existing wireless spectrum.^[15]
• DISH bought bankrupt video rental chain Blockbuster LLC in a deal valued at an estimated $228 million.^[16]
• DISH bought TerreStar for $1.38 billion in a bid to add the latter’s mobile wireless spectrum to its portfolio.^[17]

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.^[18][19][20]

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.^[21]

Litigation

Ergen companies are famous for their use of legal tactics. Ergen said, “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.” In a 2001, one of Dish's senior attorneys admitted that the company employed more than 100 law firms over a 10-year period. Dish even sued its own lawyers and was forced to pay $40 million judgement after losing.^[22]

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.^[23]

Shareholder rights

The Iron Workers Mid-South Pension Fund filed suit against Ergen in federal court in Colorado in September 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.^[24]

Sexual discrimination

According to several employees, Charlie Ergen routinely mistreats female employees. Soraya Hesabi-Cartwright filed a sexual discrimination lawsuit against Ergen in federal court in Denver. Three other former employers filed affidavits that support her allegations of abusive conduct. Cartwright claimed that Ergen's "increasingly hostile conduct" was due to her having a baby in 2001. She says he no longer treated her like "one of the boys." An affidavit filed by Cartwright's assistant said that Ergen often arrived at Cartwright's office "screaming and yelling." Chief operating officer Michael Dugan said that Ergen was "gunning" for Cartwright. Another affidavit from a vice president in customer retention and quality assurance said that Ergen challenged Cartwright more than male executives in meetings and singled out her work for negative comments. Ergen is alleged to have "made the work environment for Cartwright intolerable through relentless degradation of her contributions and skills."^[25] The lawsuit was settled for an undisclosed amount in August 2005.^[26]

Land use

When Ergen wanted to build a road on a ranch in southwestern Colorado, his neighbors opposed the idea because it would also cut through their property. A ten-year legal battle ensued that ended with a partial victory for Ergen. Despite getting permission to do so, Ergen never built the road. John Steel, the lawyer who represented Ergen's neighbors said, "We would have made any deal he wanted, but [Ergen] didn’t care. He just has this pathological need to sue people.”^[22]

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.^[27]

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.^[28]

Ergen is well known for his frugality. His office is furnished with second-hand couches and he does not fly first class.^[29] Ergen used to sign all the checks his company issued but currently signs only checks for $100,000 or more.^[22]

For years, Dish employees were required to clock in at the beginning of their day using fingerprint scanners. This measure angered many employees. The fingerprint scanners were eventually removed. Badges were previously used to monitor the arrival and departure of employees. The company started using fingerprints after Charles Ergen noticed some employees helping each other swipe their badges for them. If an employee is late an email is sent to human resources. Human resources will in turn contact the employee's manager, possibly even Charlie Ergen himself. Multiple former employees said it was common for Ergen to scream publicly at executives for arriving even minutes late.^[30] At a quarterly meeting, Ergen worried that some employees might not make it to work on time in case of snow. He encouraged employees to book rooms at nearby hotels in bad weather but only at their own expense. Ergen does not allow employees to work from home.^[22]

Judianne Atencio, who worked as Dish's head of communications for over ten years, said, “I didn’t have a life for 10 years…I couldn’t even have a dog.” There were times when Ergen screamed at her so loudly that she packed and left, only to be persuaded to return from the parking lot by a board member.^[31] Speaking of Ergen, she also said, “He’d always been so dismissive of employees. Like we were just cattle to be put into a pen.”^[22]

In a video interview, Ergen claimed that he is easy to work with for "high achievers."^[32]

Ergen also reportedly treats analysts and major shareholders poorly. Craig Moffett, senior analyst of U.S. telecommunications, U.S. cable, and satellite broadcasting at Sanford C. Bernstein once requested time with management to learn about how Dish does business. Ergen told him, “We’re too busy creating value around here to sit down and talk about it. Thanks but no thanks.”^[22] Chris Marangi, a money manager for Gamco Investors, which held about 4 millions shares in Dish, said that the company is very uncooperative. He says that despite traveling to Denver frequently has never been able to get a meeting with Ergen or any other Dish senior manager. “They’re probably the least transparent company of any I’ve ever dealt with."^[22]

Personal life

Ergen was born into an Episcopalian family^[33] in Oak Ridge, Tennessee, on March 1, 1953,^[7] the fourth of five children born to Viola (née Siebenthal) and William Krasny Ergen.^[34][35] His mother was one of the first female accountants in the state of Minnesota^[33] and his father was an Austrian immigrant who was working in Sweden as a nuclear physicist who left Europe prior to World War II.^[34] His father coined the phrase "China Syndrome".^[34] 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.^[33] Ergen received a Bachelor of Arts from the University of Tennessee at Knoxville,^[36] and an M.B.A. from Wake Forest University.^{[1][4][6][7][37]} He was a professional blackjack and poker player.^[5][36][38]

He is married to Cantey ("Candy") McAdam. They have five children.^[1] They live in Littleton, Colorado.^[1][7] 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.^[7][39]

Gambling

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.^[40]

Tax shelters

In 2010, Ergen paid only $3,185 in property taxes on his second home at the 600-acre Enchanted Mesa Ranch by using a tax exemption designed to benefit farmers.^[41]

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.^[42][43]

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 co-founded of the Satellite Broadcasting and Communications Association.^[42][43]

References