DirecTV agrees to buy satellite rival Dish
DirecTV unveiled plans Monday to buy Dish Network, bringing together two satellite TV rivals at a time when both are rapidly losing market share to streaming platforms.
Under the terms of the deal, DirectTV will pay a nominal consideration of $1 and assume billions of dollars in debt held by Dish owner EchoStar. The deal also would transfer majority ownership of DirectTV from AT&T to the private equity firm TPG Capital, which took a 30 percent stake in 2021.
The two companies said the deal will improve the viability of satellite television by allowing them to potentially cut at least $1 billion in costs and deliver lower prices for consumers.
The combined company 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,” DirecTV chief executive Bill Morrow said in a statement, as well as help it realize “operating efficiencies.”
The two companies said they expect the deal to close in the fourth quarter of 2025.
Both satellite providers have struggled to grow as Americans embraced cord-cutting amid a proliferation of streaming platforms such as Netflix, Disney Plus, Amazon Prime and Hulu, which offer lower prices than cable. (Amazon founder Jeff Bezos owns The Washington Post.)
DirectTV was thought to have around 11.3 million subscribers at the end of 2023, according to an estimate from Fitch Ratings. That’s a 25 percent drop from the 15.1 million reported in 2014, when AT&T bought the TV provider for $47.1 billion.
The EchoStar deal would bring about 6 million more subscribers from Dish, along with about 2 million from Sling TV, according to recent EchoStar regulatory filings.
EchoStar has an estimated $21.6 billion in debt, according to a Monday investor presentation, and about $500 million in cash to fund its operations. Under the deal announced Monday, DirectTV would assume about $9.75 billion in debt, but the deal is contingent on reducing the aggregate principal of that debt by at least $1.56 billion, according to the two companies. The company’s debt-holders would have to sign off on that plan before the merger can move forward, with DirectTV and Dish retaining the right to walk away from the deal.
The deal has already been approved by both companies’ boards of directors but still requires sign-off from regulators. An attempt to merge DirecTV and Dish failed in 2002, as the Department of Justice sued to block it over concerns it would reduce competition.