DIRECTV-Dish Merger: Would Federal Regulators Approve It?

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, would the federal government ok the DIRECTV and Dish merger? They didn’t approve it the last time they tried to merge, right? — Carl, Boulder, Colorado.

Carl, Bloomberg News reported last night that DIRECTV and Dish are close to agreeing to a merger and it could be announced in the coming days. The Wall Street Journal later confirmed that report and added that a deal announcement could be as early as Monday.

Bloomberg wrote that the negotiations, which the news service says are in the “advanced stages,” could still fall apart as the companies discuss final details such as how the combined company of satellite TV services would be structured. However, there’s another reason why the merger might not be successful.

The federal government.

The merger agreement would have to be approved by federal regulators which would include the Federal Communications Commission and the Department of Justice. And it’s true that the last time (2002) that DIRECTV and Dish tried to merge, the feds nixed it on the grounds it would be anti-competitive.

However, there are two reasons why it’s likely the merger would be approved this time.

1. The Video Industry Is Dramatically Different

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 have 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 needs an overhaul to survive in the coming years.

Consequently, federal regulators are likely to put aside concerns that the merger would reduce video choices in rural areas and approve it.

2. Friends In High Places

There’s a 50-50 chance that the current Democratic administration will be replaced in January by Republican Donald Trump whose team would be more favorable to corporate mergers. But if Vice President Kamala Harris prevails, DIRECTV and Dish might have even more leverage in DC. (The feds would likely not vote on the merger until early 2025, at the earliest.)

The New York Post reported last March that the Justice Department dismissed a $3.3 billion civil fraud lawsuit against Dish after company chairman Charlie Ergen and his wife donated more than $113,000 to President Biden’s re-election campaign. (Biden has since decided not to run.) Ergen has donated to Democratic officeholders for years, including holding private fundraisers for presidential candidates, so it’s fair to assume he has significant influence within the party. This would come in handy if the Democrats win in November.

Add the two together and it’s highly likely that a DIRECTV-Dish merger would be approved by federal regulators, regardless of who’s running the show.

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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