[Source – broadcastandcablesat.co.in]
EchoStar and DirecTV Join Forces
In a significant shakeup in the pay-TV industry, EchoStar announced on Monday that DirecTV to acquire Dish TV and its digital streaming service Sling. The agreement will bring together two of the largest satellite TV companies in the U.S., allowing them to better compete in a market increasingly dominated by streaming services. EchoStar shares fell more than 11% following the announcement.
DirecTV to acquire Dish TV for a nominal fee of $1 while assuming approximately $9.75 billion in debt. According to a press release, the agreement hinges on approval from some of Dish’s bondholders and is expected to be finalized in the fourth quarter of 2025. Once the merger is completed, the combined entity will serve nearly 20 million customers.
A Strategic Move to Regain Market Strength
EchoStar CEO Hamid Akhavan emphasized that this merger comes at a pivotal time. “We needed to create a company with enough scale to negotiate better deals with programmers and offer more flexible, smaller packages that consumers are asking for,” Akhavan said in an interview on CNBC’s “Squawk on the Street.” He added that the pay-TV industry has been on a downward trend, with traditional satellite providers like Dish and DirecTV struggling to keep up with newer streaming platforms that offer a broader reach.
Akhavan also acknowledged that EchoStar could no longer sustain both its video distribution and core wireless internet businesses, prompting the decision to focus resources on its wireless offerings. He expressed optimism about the company’s future, though he signaled that no significant expansions would occur soon as the company adjusts to these changes.
DirecTV to Acquire Dish TV as AT&T Exits Ownership
In a related move, AT&T announced it would sell its remaining 70% stake in DirecTV to private equity firm TPG for $7.9 billion. AT&T had previously sold 30% of its stake in 2021 for $16.2 billion. The telecommunications giant originally acquired DirecTV in 2014 for a staggering $48.5 billion but has since been scaling down its investment.
A Long-Awaited Merger Finally Realized
Rumors of DirecTV to acquire Dish TV have circulated for decades as part of potential merger discussions. The two companies nearly sealed a deal in 2002, but it was blocked by the Federal Communications Commission (FCC). Since then, the satellite TV industry has faced multiple setbacks as consumers turned toward streaming services. EchoStar has been grappling with financial struggles, including a $2 billion debt looming and a failed attempt to refinance it. The company’s diminishing cash reserves had led to increased bankruptcy concerns.
Looking ahead, Akhavan believes that the merger puts the newly combined entity in a better position to compete. “We are as competitive as anybody else in terms of our offerings, whether it be price, coverage, or quality,” he said, indicating that the focus will now shift toward customer acquisition.
