DirecTV acquires Dish in merger of satellite TV rivals

DirecTV and Dish Network, long-time opponents of satellite TV, are merging. DirecTV announced a deal with Dish parent company EchoStar to acquire Dish in a deal worth nearly $10 billion.

Under the terms of the purchase agreement, DirecTV will acquire EchoStar’s video distribution business, including Dish TV and Sling TV, in exchange for a “nominal consideration” of $1 (yes, one dollar) – plus the assumption of the Dish unit’s net debt with a total face value of approximately $9.75 billion. The companies expect the deal to close in the fourth quarter of 2025.

In addition, AT&T said it will sell its 70% stake in DirecTV to TPG, the venture capital firm that owns 30% of the operator. That deal is expected to close in the second half of 2025.

The deal requires approvals from U.S. regulators, including clearance from antitrust authorities. Analysts have said they expect a combination of DirecTV and Dish to win regulatory approval, given the dramatic decline in the traditional pay-TV sector as consumers have cut the cord and flocked to streaming services.

Together, DirecTV and Dish would have nearly 20 million customers, which is about half their peak levels. According to Leichtman Research Group estimates, the DirecTV service had an estimated 11.3 million subscribers (including AT&T U-verse TV) at the end of 2023, up from a peak of 25.5 million at the end of 2016. Dish, which once had more than 14 million customers, ended the second quarter of 2024 with 8.07 million pay TV subscribers (6.07 million of which were for Dish TV and 2 million for Sling TV).

Following the completion of the Dish acquisition, DirecTV will continue to be led by CEO Bill Morrow and CFO Ray Carpenter. The combined company’s headquarters will be El Segundo, California (where DirecTV is currently based).

DirecTV launched in 1994 and Dish followed in 1996, and the two satellite TV companies provided stiff competition for the established cable TV operators. But over the past decade, both have seen their subscriber bases shrink by millions (much like traditional cable TV), with the rise of streaming leading to an exodus of consumers from the sector. DirecTV and Dish have launched Internet-delivered pay-TV packages, but these have not offset losses on the satellite side.

Previous rapprochements between DirecTV and Dish, dating back to 2001, have faced regulatory hurdles. But today, “It is difficult to imagine regulators would block a deal,” MoffettNathanson chief analyst Craig Moffett wrote in a Sept. 16 letter to clients. ‘It’s better to have one [satellite TV operator] then none.”

DirecTV said it estimates the combination with Dish has the potential to generate cost savings of at least $1 billion per year. According to Moffett, the operational synergies between DirecTV and Dish would “probably be much more limited than you would think” and he said a merger of the two would have limited impact on the overall trajectory of the industry. For example, the two companies have no synergies in the satellite fleet because they use different conditional access (video scrambling) technology.

“It is difficult to argue that a merger should not happen; that clearly should happen,” Moffett wrote in the September 16 note. “Consolidation during a period of prolonged downturn is always to be expected. But it would be a mistake to overestimate its importance. Adding a year or so to the expected life of satellite TV will not change the story for programmers, distributors or even for satellite TV.”

AT&T, which bought DirecTV in 2014, spun off the satellite TV operator three years ago and retained a 70% stake, with private equity firm TPG Capital owning the remaining 30%.

Two years ago, DirecTV suffered a blow when it lost its exclusive deal with the NFL for the Sunday Ticket premium games package, which it had offered since 1994. Google signed a seven-year deal with the NFL to sell the package through YouTube, starting with the 2023-2024 season; Currently, Sunday Ticket includes all out-of-market regular season NFL games on Sundays airing on Fox and CBS.