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Will DIRECTV & Dish Merge?

Q. I read that DIRECTV and Dish are thinking of merging. Do you see that happening? — Victor, Albany, New York. 

Victor, I think you are referring to an analysis just published by the research firm, Pivotal, in which its founder Jeff Wlodarczak says he thinks DIRECTV and Dish could come together in some form.

Noting that both satcasters are losing subscribers at an unprecedented rate, the analyst theorizes it would make sense for the two to merge to reduce expenses and, possibly, create a more formidable venture.

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“One has to think AT&T (DIRECTV’s owner) is looking to somehow shore up its melting DIRECTV ice cube and a merger (or a sale) with Dish would go a long way to boosting the business,” he wrote.

DIRECTV, which once was arguably the most powerful company in video, is in rapid decline, having lost hundreds of thousands of subscribers in the last year. And AT&T, which purchased the satellite TV service for $67 billion in 2015, seems clueless on how to turn the satcaster around. Consequently, I agree with Wlodarczak that AT&T would entertain almost any scenario that would take DIRECTV off its hands without taking a bath in the process.

But that’s where this scenario likely hits a roadblock. Would Dish agree to pay AT&T enough money to allow AT&T’s executives to save face with their shareholders? Probably not. Dish doesn’t appear to have any better idea on how to run a satellite TV business these days so why would it double-down on the shaky category and overpay for DIRECTV?

And it would have to overpay. AT&T’s executive team, led by CEO Randall Stephenson, is under pressure to show its purchase of DIRECTV will eventually produce dividends. Anything less than a princely sum in the sale would be seen as a defeat, perhaps one that would cost Stephenson his job.

Likewise, I can’t imagine AT&T would buy Dish and expand its satellite TV business when it’s having such difficulty making DIRECTV work.

Of course, there could be a third option where the two services consolidate assets and attempt to operate without one company assuming control. But that would be very complicated to assemble, particularly with Dish Chairman Charlie Ergen involved. (Ergen is not the easiest person to work with.)

So while current market conditions would suggest a merger could be on the table now, I am dubious that it will actually happen.

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— Phillip Swann

About TV Answer Man (1578 Articles)
The TV Answer Man is veteran journalist Phillip Swann who has covered the TV technology scene for more than two decades. He will report on the latest news and answer your questions regarding new devices and services that are changing the way you watch television.

8 Comments on Will DIRECTV & Dish Merge?

  1. Joe Blasi // May 7, 2019 at 3:01 pm // Reply

    a few years maybe with the line NOW WITH MORE HD THEN CABLE WITH MEANY CHANNELS WITH EAST AND WEST HD FEEDS.

  2. Steve Bopp // May 7, 2019 at 3:52 pm // Reply

    The DBS television model and Directv by extension, is doomed. Stephenson of AT&T has declared it so. The new model will be 5G and cloud based DVR’s, totally abandoning the broadcast center to satellite to individual dish model. Having a television dish on your rooftop will someday soon be a quaint notion from the past.

  3. Yes that be good for both dish derctv merger they have more channels for less money…

  4. Tammy Byrge // May 8, 2019 at 9:27 am // Reply

    Dish tried to merge with dtv 8 to 10 years ago an it got blocked because of the monopoly an then now att has bought dtv now look what happened

  5. AT&T already DID turn DirecTV around, an that is why DTV is “in rapid decline, having lost hundreds of thousands of subscribers in the last year.”

  6. I’m one of those thousands of subscribers who have recently left. For me the straw that broke the camel’s back was the advertisements for on demand movies that would appear in the screensaver when I paused the DVR. For some reason I greatly resented how DirecTV turned my television into a giant billboard in my own living room.

  7. Duke Sweden // May 8, 2019 at 11:28 pm // Reply

    I’ve never understood how companies run by incompetent morons can amass a value of billions of dollars.

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