DirecTV has completed a deal to buy Dish and Sling. The company had been trying to do this for many years to compete with streaming services.
DirecTV announced Monday that it would acquire Dish TV, Sling TV, and its owner EchoStar through a debt-exchange transaction. This includes a $1 payment plus the assumption of approximately $9.8 Billion in debt.
It’s been long rumored that a DirecTV and Dish combination is in the works. Over the years, headlines have appeared about reported discussions. The two companies almost merged over two decades ago, but the Federal Communications Commission cited antitrust concerns to block the owners’ $18.5 billion deal.
Since then, the pay-for-TV market has changed significantly. The demand for traditional satellites continues to decline as more and more people tune in to online streaming giants. Although high-profile deals have been particularly difficult under the Biden and Harris administrations, regulators may be more willing to approve DirecTV’s pairing with Dish this time.
DirecTV announced Monday that it will be able to offer smaller packages of content at lower prices and provide consumers with a convenient one-stop shop for entertainment programming.
The company hopes that this will appeal to those who left satellite services in favor of streaming. The company stated that DirecTV, Dish, and their combined satellite subscribers have lost 63% since 2016.
Bill Morrow, DirecTV’s CEO, said that the company operates in an industry with a high level of competition. With greater scale, DirecTV, a combined company with Dish, will be able to better work with programmers to realize the vision we have for the future of television, which is to curate and distribute content that’s tailored to customer interests.
EchoStar could be saved by the current deal. According to reports, the Colorado-based telecommunications firm has been facing bankruptcy due to its continued loss of cash.
EchoStar revealed in a recent filing that it only had $521 million of “cash” on hand. The company also forecast negative cash flow for the rest of the year, while also pointing out major debt payments looming, with over $1.98 billion in debt due to mature in November.
Hamid Akhavan, CEO of EchoStar, said that with an improved financial profile, they will be able to enhance and deploy their nationwide 5G Open RAN Wireless Network. This will give U.S. consumers more options and drive innovation faster.
EchoStar can now focus on other areas, such as its wireless carrier Boost.
“We play to win in the wireless business.” “There’s no doubt,” Akhavan stated during a telephone conference, adding that if the company wants to reach its goals in the future it may have to look for additional funding.
EchoStar shares fell by more than 14 percent in midday trading on Monday.
The DirecTV-Dish deal is expected to close by the fourth quarter of 2025. It is dependent on several factors including regulatory approvals, bondholders rewriting nearly $1.6 billion of debt related to Dish and other factors.
The combined company’s headquarters will be in El Segundo (California).
Michael Rollins, Citi Investment Research, wrote to clients that he believed the regulatory approval was likely to be higher than 50%. This is because the combined company would have the ability to improve its competitiveness by offering a variety of linear video packages and to take a more assertive stance in offering a product for live streaming video.
The analyst said that there is still a lot of uncertainty about whether the Federal Communications Commission or Department of Justice, as well as other regulators, will give the necessary approvals. This was based on conversations with industry experts and company managers over the past few years.
AT&T announced shortly before DirecTV’s announcement that it would sell its remaining DirecTV stake to TPG, a private equity firm. The deal was valued at approximately $7.6 billion.
The communication giant has cut all ties with the entertainment industry.
AT&T announced Monday that in a filing to the Securities and Exchange Commission, it would receive payments from TPG and DirecTV in exchange for its remaining 70% share in the satellite television company. The payments will be $1.7 billion for the second half of this year, and $5.4 billion the following year. The remainder will be paid by 2029.
AT&T acquired DirectTV in 2015 for $48.5 billion. In 2021, after losing millions of customers, AT&T will sell a 30% stake in the DirectTV business to TPG.
The AT&T deal is expected close in the second quarter of 2025.
