DirecTV, Dish merger set to create US pay TV giant as streamer competition ramps up
US-based pay TV platform DirecTV and satellite TV service Dish are to merge, creating the biggest US payTV operator, after DirecTV agreed to buy its rival for just a single dollar.
Bill Morrow
DirecTV will acquire Dish from owner EchoStar Corp for a nominal US$1 consideration but also assume substantial Dish debts totalling around $9.75 billion, according to a statement issued yesterday.
The deal is contingent upon Dish’s bondholders agreeing to accept the principal amount of the company’s debt of at least $1.568 billion.
DirecTV is owned by AT&T and joint-venture partner TPG. The new deal will see TPG acquire the 70% stake in DirecTV that it doesn’t already hold from AT&T, paying $7.6 billion in multiple instalments through to 2029.
The two rival companies have flirted with amalgamating for several years now. A previous DirecTV and Dish merger was blocked by US regulators in 2002, but the TV ecosystem has changed almost beyond recognition since then.
Teaming up could now see the combined service take on streaming giants like Netflix and Amazon’s Prime Video by offering bundled content package deals to around 19 million potential viewers – roughly one-quarter of the total US market.
At present, research from Wall Street analysts suggests that DirecTV has 11 million customers, while EchoStar has around 8 million across Dish’s satellite offering and the internet-based Sling TV platform.
It’s estimated that DirectTV and EchoStar could save around $1bn a year by combining their costs. That could help the new firm win back some of the subscribers the two companies have lost due to streaming platforms eating into the market share of the pay TV and satellite service sectors.
DirecTV CEO Bill Morrow said the merger had been: “Not a matter of if, only a matter of when. We want to use our influence to tell the programmers: we are the only pure-play, video-focused entity that’s content agnostic so let us serve a consumer interest that you cannot.”
The merged offering will be called DirecTV and led by Morrow. If approved by regulators, the deal is scheduled to close in the fourth quarter of 2025.
