Q. I would think that AT&T would have sold DIRECTV to Dish by now. Do you have any idea what’s holding up the deal? Is it Charlie Ergen being Charlie Ergen and asking for a low price? — Manny, Newark, New Jersey.
Manny, AT&T has said it’s not inclined to sell DIRECTV, but the company’s resolve seems to weaken with every quarterly report showing larger and larger subscriber defections. Since the company purchased DIRECTV in 2015, the satellite TV service has lost around five million customers.
To make matters worse, AT&T seems to have punted on DIRECTV, saying it will market the satcaster largely in rural and suburban areas where Internet access is limited. Considering that DIRECTV was once the biggest and most powerful TV service in the land, that’s quite a statement. It’s like saying the New York Yankees will start playing in Triple A.
Dish is the obvious, and possibly, the only candidate to purchase DIRECTV. The nation’s second leading satellite TV service is also experiencing customer declines, but not at the same rate. And adding DIRECTV’s customer base would make Dish the number one pay TV service in the country.
Charlie Ergen, Dish’s chairman and co-founder, has even stated that he thinks a DIRECTV-Dish merger is “inevitable.”
So what could be holding up the ‘inevitable’ deal?
Ergen’s history of turning every negotiation into an ego-fueled game of high stakes poker could be one obstacle. Dish and DIRECTV have discussed mergers in the past only to see talks dissolve when Ergen started doing ‘Ergen things.’ (The companies did merge nearly 20 years ago, but the FCC nixed it on grounds that it would be anti-competitive.)
But there’s another factor here that could be temporarily holding up a deal.
Dish is scheduled on July 1 to close on its $1.4 billion acquisition of Sprint’s Boost Mobile subsidiary, which will significantly aid Dish’s plan to build a 5G wireless network. The sale process has been bumpy, but everything looks good for next week’s completion.
I don’t know this has been the holdup. (We don’t even know for sure that the companies are talking yet.) But it would make sense for Dish to resolve the Boost deal before moving to DIRECTV.
Manny, hope that makes sense. Happy viewing, and stay safe!
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— Phillip Swann