You gotta admire Charlie Ergen’s — the poker playing satellite television pioneer and one of the most entrepreneurial men in America — willingness to disrupt his own business and take a flier on Blockbuster, potentially positioning it to compete with Netflix. As I have discussed before, Netflix disrupts MVPD. Most big company CEOs would not be buying a business that potentially disrupts the core business, other than to snuff it out (which Charlie did not need to do if that was his intention since many of the other bidders looked to be ready to liquidate Blockbuster). Most big company CEOs also would pause before buying a business that is dilutive to earnings as this one reportedly is given Blockbuster’s current cash flow hole. But at about $300 million, presumably Charlie sees manageable downside and a potentially huge upside in evolving the Blockbuster business into something truly competitive with Netflix.
This is a CEO who still runs his company with the hustle, scrappiness, and street-fighting attitude of the entrepreneur who took the company from conception to launch in competition with General Motors and Hughes, at the time the gold standard in bureaucracy and deep pockets, which launched DirecTV. People can have mixed feelings about some of the tactics, but it’s hard to dispute this man’s stomach and vision. Charlie is used to taking big risks, as when he used a Chinese satellite company in the mid-1990s (before our current view of China as a world-beater ) that had a 50% rocket failure rate to launch its first satellite into orbit, with a rocket failure potentially blowing out his business plan. Oh and by the way, Charlie was in his 40s when he launched his satellite television business. Here is an old profile.