DirectTV will pay $1 to buy EchoStar’s Dish DBS, along with agreeing to assume about $9.75 billion of Dish’s debt, in a deal announced Monday that would create the nation’s biggest pay-TV provider.
The deal must be approved by government regulators who blocked a proposed $19-billion merger of the companies 22 years ago on competitive grounds, CNN noted.
However, the TV landscape has radically changed since 2002, with consumers cutting their cable cords and unplugging their rooftop dishes in favor of video streaming services.
Talks between the two satellite companies have been on and off for the past 10 years. DirectTV has lost 4 million customers in the past three years, according to CNBC. The combined company today would have 20 million subscribers, with 11 million from DirecTV, CNN says. Charter and Comcast each have just over 12 million customers, according to The Hollywood Reporter.
“The two pay-TV operators, which are faced with a rapidly eroding subscriber base, are betting that a combination will help them compete better against pay-TV rivals such as Comcast’s Xfinity, Charter Communications’ Spectrum brand, and YouTube TV and enhance their ability to negotiate with programmers,” CNBC reported.
The Hollywood Reporter noted that while cable companies tout their broadband internet and mobile services, the satellite operators continued to concentrate on TV, despite losing market share to streamers.
“Streaming services owned by large tech companies and programmers now have subscription numbers that far exceed those of pay TV distributors," the companies said in their joint media release early Monday. "Content that was historically the mainstay of traditional pay TV — news, sports, and entertainment — is now available exclusively or first-run on direct-to-consumer streaming services."
DirecTV is buying EchoStar’s video distribution business Dish DBS, which includes Dish TV and Sling TV. Read more about EchoStar’s debt and the financial transaction at CNBC.
