DIRECTV-Dish Merger: Will It Happen This Time?

By Phillip Swann
The TV Answer Man –Follow me on X.
Former editor of Satellite DIRECT magazine. Reported on DIRECTV for 30 years.

TV Answer Man, you got the DIRECTV and Disney fight prediction right. How about Dish and DIRECTV? Will they merge in your crystal ball? — Steve, Arlington, Virginia.

Steve, Bloomberg and Reuters are both reporting that satcasters DIRECTV and Dish are discussing a merger. The two companies have engaged in merger flirting for years and even consummated a deal more than two decades ago. However, federal regulators nixed the DIRECTV-Dish merger proposal in 2002 on grounds that it would be anti-competitive.

But much has changed in the last 22 years. The two satellite TV companies are no longer dominant in the video industry. Instead, their fortunes have dwindled with the two losing roughly 20 million subscribers combined over the last decade due to cord-cutting and other factors. There’s also no end in sight for satellite subscriber defections as Americans turn to streaming to reduce costs.

The subscriber losses has taken its toll on both companies, but Dish has been hurt the most. Financial analysts have speculated that Dish might have to declare bankruptcy in the coming months. DIRECTV, which merged with the private equity firm, TPG, in 2021, is doing better but the company realizes that it needs an overhaul to survive in the coming years.

Consequently, I predict that the Dish-DIRECTV merger will happen this time. Yes, there are still concerns that federal regulators may not approve it because it would reduce video choices in rural areas. Yes, it still might be difficult for DIRECTV’s management team to negotiate a deal with Dish Chairman Charlie Ergen who’s regarded as one of the industry’s toughest negotiators. But the financial circumstances are so dire that both companies will put aside those issues and come together. Failure to do so will unquestionably result in both DIRECTV and Dish collapsing sooner than later.

In the short term, the DIRECTV-Dish merger would create a relatively powerful company with nearly 20 million subscribers combined. Cord cutting isn’t going away so the subscriber numbers will keep falling. But the newly formed satellite company could stay in business for several years by focusing on providing dish service in rural areas and streaming elsewhere. It also would save significant money by eliminating duplicate efforts and wielding more power in carriage negotiations.

Steve, hope that helps. Happy viewing and stay safe!

The TV Answer Man is veteran journalist Phillip Swann who has covered the TV technology scene for more than three 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. See the bio for Phillip Swann here.

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