Dish Chairman Charlie Ergen today said a merger between his company and DIRECTV is “inevitable.”

Speaking to financial analysts following Dish’s release of its fourth quarter report, Ergen noted that the pay TV industry has lost millions of subscribers in the last few years due to rising subscriber fees caused by escalating programming costs.

“The growth in TV is not coming from linear TV (live channels) providers, but from huge programmers,” Ergen said, suggesting there will need to be consolidation among the providers as the industry shrinks.

Dish attempted to merge with DIRECTV nearly 20 years ago, but the deal was nixed in 2002 by the Federal Communications Commission on grounds that it would be anti-competitive and therefore anti-consumer. However, the video industry has exploded since then with the advent of streaming. Consumers now have more video choices than ever so it would be more difficult for the federal government to justify a rejection of a satellite merger today.

Ergen did not offer any indication that his company is talking to AT&T, which now owns DIRECTV. The telco has said publicly that it has no plans to sell DIRECTV, but the satellite service has lost roughly four million subscribers since AT&T purchased it in 2015. Industry analysts have speculated that AT&T needs to sell now or risk more staggering losses in the coming months and years.

But why would Dish be interested in DIRECTV if the industry is in decline? After all,  Ergen’s company has its own difficulties maintaining a subscriber base in this environment. Dish’s sub base has fallen from 14 million a decade ago to slightly more than nine million today. Wouldn’t a deal for DIRECTV just add another headache?

While Dish is also losing customers to cord-cutting, and the expansion of streaming options, the acquisition of DIRECTV would give it a total of 25 million satellite TV subscribers. (DIRECTV has roughly 16 million subs now.) That would make Dish the nation’s largest pay TV company. (And the number would reach nearly 28 million when you add in Sling TV, Dish’s live streaming service, which has more than two million subscribers.)

With roughly 28 million subscribers, and no competition in the satellite TV category, Dish could stay profitable for years by generating more advertising, and pressuring programmers to offer lower carriage fees.

Think of it. Few programmers would want their channels suddenly removed from a pay TV service that reaches more than 28 million homes.

You might say the federal government would still frown upon approving a merger that would give so much power to one video company, particularly considering that the FCC rejected that 2002 merger. But with the rise of streaming, the pay TV business (cable, satellite, telcos) no longer dominates the video category as it did 17 years ago. Consumers today have a multitude of video options, and the number is growing almost daily.

Dish and DIRECTV could even argue that the merger/sale is necessary now to keep the satellite TV business afloat in the coming years.

For AT&T, the sale would give the company a chance to re-set its strategy, and focus entirely on the streaming business. The company owns AT&T TV Now, a live streamer with slightly less than one million subs, and next week it’s expected to launch AT&T TV nationwide as a streaming alternative to DIRECTV. (AT&T also owns HBO and it plans to offer multiple streaming services under that brand name.)

Certainly, AT&T’s denials that any sale, much less one to Dish, is ‘inevitable’ have to be carefully considered. But Ergen’s public admission that a merger is likely at some point is revealing. From covering Ergen over three decades, I know he rarely says something that provocative without a purpose. And my guess is that the purpose is to get AT&T to the negotiating table, sooner than later.

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— Phillip Swann