Is DISH Building the Perfect Beast?

When DISH Network (Nasdaq: DISH  ) and sister company EchoStar (Nasdaq: SATS  ) won the auction for Blockbuster's assets, DISH CEO Charlie Ergen didn't seem sure what he wanted to do with the company. "We think there might be synergies back with DISH Network's business. We're not sure yet," he told analysts in the ensuing earnings call. And just like a meandering Seinfeld episode, the overarching strategy just couldn’t be explained: "You'll have to just wait and see where it all comes together. It's a little hard to explain it this early in the show."

Since then, DISH has gone on a veritable buying rampage in the bargain bin. Courts are reportedly going to approve the $1.4 billion buyout of bankrupt satellite operator DBSD, and the company is spending another $1.4 billion on bankrupt satellite phone service TerreStar Networks.

Both the DBSD and TerreStar buyouts come with generous helpings of wireless bandwidth licenses, possibly opening the way for DISH to start some sort of terrestrial communications or broadcasting network. Slap the Blockbuster brand on a video service over the radio waves, perhaps akin to the now-defunct  MovieBeam service that was launched and then abandoned by Walt Disney (NYSE: DIS  ) , and you might get a Frankenservice that makes sense. No guarantees, but there's a chance.

Bloomberg reports of a potential bidding war over DVR veteran TiVo (Nasdaq: TIVO  ) , featuring the wits and wallets of Google (Nasdaq: GOOG  ) , Microsoft (Nasdaq: MSFT  ) , and Rovi (Nasdaq: ROVI  ) , now that the company won a long-fought patent war with DISH.

In my opinion, it’s possible that DISH could get involved in the bidding as well. Heck, DISH could have an unfair advantage in the negotiations. Simply buying TiVo would obviate the need to pay out some $500 million of a court settlement over TiVo's DVR patents, so the effective cost of any deal would be lower for DISH than for the others.

Then again, DISH would be cutting it tight on cash. With only $3.4 billion of cash on hand versus $6.5 billion of debt, DISH would have to tap new debt or launch a stock-based offer to cover some of the expected $2.4 billion price tag for TiVo.

Has Ergen figured out how to build his Frankenstein of a media business yet? When will he tell his shareholders about it? Add DISH to your Foolish watchlist to keep a close eye on the company. When Ergen completes his beastly plans, you'll be the first to know. In the meantime, feel free to speculate on his plans in the comments section below.