Years of speculation have finally come to fruition today, as the last two remaining satellite TV providers in the United States announced plans to merge in a deal worth nearly $10 billion. In an announcement from its owner AT&T, DirecTV agreed to acquire Dish parent company EchoStar that will result in creating the nation’s largest pay-TV service.
In a separate announcement, TPG, which AT&T has partnered with since 2021 to operate DirecTV’s satellite and streaming services as a joint venture, agreed to acquire the remaining 70% stake in DirecTV that it does not already own, for $7.6 billion. The deal is expected to be formalized by the end of 2025.
The agreement allows DirecTV to acquire EchoStar’s video business, which includes Dish TV and its Sling TV streaming service for $1 (not a typo) plus Dish’s net debt, valued at about $9.75 billion.
AT&T and TPG said their separate agreement will not be affected by the merger. Analysts expect the merger—which has been attempted in the past but resisted by regulators—will be quickly approved, given the decline in traditional pay-TV revenues that has coincided with the rise in cord cutting and streaming. U.S. pay-TV providers, including satellite TV services, lost 5.04 million subscribers in 2023, an increase from 4.6 million in 2022. This decline is part of a larger trend where pay-TV penetration dropped from 88% in 2010 to 64% in 2023, according to Evoca.
A combined DirecTV/Dish will have almost 20 million subscribers, making it the nation’s largest pay-TV service after Comcast, which has just over 13 million as of the end of June. DirecTV has about 11.3 million subscribers and Dish has approximately 8.07 million subscribers.
DirecTV CEO Bill Morrow and CFO Ray Carpenter are expected to stay on after the merger with the company’s HQ in El Segundo, Calif., current home to DirecTV.
Morrow said of the deal, “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.”
Hamid Akhavan, President and Chief Executive Officer, EchoStar, called the deal “in the best interests of EchoStar’s customers, shareholders, bondholders, employees, and partners,” adding that “with an improved financial profile, we will be better positioned to continue enhancing and deploying our nationwide 5G Open RAN wireless network. This will provide U.S. wireless consumers with more choices and help to drive innovation at a faster pace. We expect Dish and EchoStar bondholders to benefit from two companies with stronger financial profiles and more sustainable capital structures.”
DirecTV launched 30 years ago in June 1994 and Dish debuted in 1996. After some consolidation in the late ‘90’s, the satellite TV market reached its peak during the first decade of the 21st century. However increased competition from pay-TV providers such as Comcast and Charter—which upped its broadband speeds, which, in turn helped birth the streaming phenomenon—took its toll on the industry by the 'teens.
Recent dust-ups, such as DIrecTV’s carriage dispute with Disney as well as the loss of exclusive NFL-wide coverage with its Sunday NFL Ticket package to YouTube TV two years ago, further illustrated the industry’s decline in recent years.
