Inside you are two wolves: One with a healthy skepticism about monopolies, and another that longs to preserve the dignity of traditional television. Those wolves are at war today with the news that DirecTV has made a deal to acquire Dish TV, which combined will become the U.S.’s largest pay-TV provider. The same merger was blocked by the FCC and the Justice Department back in 2002 “on the grounds that combining the two biggest satellite TV players would harm competitors,” per The New York Times. But the industry has completely transformed in the last 20 years, and now a merger might be the only way to keep this sector of the business alive.
In a statement (via Variety), DirecTV CEO Bill Morrow said, “With greater scale, we expect a combined DirecTV and DISH will be better able to work with programmers to realize our vision for the future of TV, which is to aggregate, curate, and distribute content tailored to customers’ interests, and to be better positioned to realize operating efficiencies while creating value for customers through additional investment.”
Dish is reportedly riddled with debt, so DirecTV made a deal with Dish’s parent company EchoStar at a steep discount. Like, really steep: DirecTV acquired EchoStar’s video distribution businesses (including Dish and Sling TV) for just $1, according to Variety. The deal will actually cost DirecTV since it will now assume Dish’s $9.75 billion in debt. In a separate transaction, AT&T will also sell its 70% stake in DirecTV to TPG, giving the private equity firm (which currently owns a 30% stake) full control of the business. Both deals are expected to be closed by late 2025, pending regulatory approval.
The Justice Department signaled disapproval about a Dish/DirecTV merger as recently as 2020 (per the NYT), but analysts predict this latest attempt at a deal is going to get the green light based on the dire state of the traditional television game. According to Variety, the combined company would have nearly 20 million subscribers, but that’s still down 63% from their peak levels in 2016. “At the end of the day, you’re better off with one than none,” said Craig Moffett, an analyst for MoffettNathanson (via the NYT). “And neither one is going to survive very long on their own. And to be fair, even putting them together is not going to change the trajectory of the business.”