Dish Network Corporation… Seeking Spectrum (Business)

[SatNews] Word is that Charlie Ergen, who is the chairman of satTV operator Dish Networks Corp., has made an offer for the L-band spectrum held by LightSquared, Inc., which is currently in the throes of bankruptcy proceedings. Some $1.7 billion in bank debt is held by a variety of hedge funds (including Sound Point Capital Management LP, see next paragraph)… Ergen’s cash offer could substantially eliminate that sink hole. Such could upset the bankruptcy apple cart for LightSquared and force a spectrum auction within just a few months.

This is an all cash offer and is totally unrelated to hedge fund Sound Point Capital Management LP‘s purchases, of late, of LightSquared debt. This is an important fact to mention, as the hedge fund has a relationship with Mr. Ergen. With an acquisition of this spectrum, such would place Dish in a highly positive position through Ergen’s ongoing negotiations to purchase Sprint Nextel Corp., as he would then have the necessary wireless spectrum in hand to support and expand that wireless network. Also in the bidding for that company is SoftBank Corporation of Japan, as they agreed to buy into 70 percent of the firm last year.

However, a remaining obstacle—should all of the foregoing come to positive fruition for Ergen—is the fact that the LightSquared spectrum remains a dark horse with the DoD and agricultural users, due to claimed GPS navigation interference. To offset such “concerns” could require a huge wad of cash.