The DIRECTV-Dish Sale: Everything You Wanted to Know But Were Afraid to Ask

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

DIRECTV revealed last Monday that it will buy Dish’s TV business including its satellite service and its live streaming unit, Sling TV. The news has triggered enormous interest in and outside the satellite TV audience as journalists, analysts and regular consumers try to determine what it will mean for the satellite TV business and the industry as a whole. I have compiled some of the biggest questions and provided some answers and here they are:

Why Is Dish Selling Out to DIRECTV?
DIRECTV is buying Dish and Sling TV for the tidy sum of $1. However, the deal is more complicated than that. DIRECTV will also assume Dish’s $20 billion debt. And that’s why Dish is ‘selling out.’ It has little choice. The subscriber losses over the years (roughly 6 million in the last decade) combined with Dish’s investment in the 5G wireless business has left the company nearly broke. If Dish didn’t sell to DIRECTV, it likely would have had to declare bankruptcy in the coming months. With this deal, under the EchoStar banner, Charlie Ergen can now focus exclusively on building the wireless biz which could take even more money to complete but has a more promising future.

When Could Dish’s Subscribers Be Switched to DIRECTV?
DIRECTV’s announcement doesn’t mean the companies will automatically become one. The deal will have to be approved by federal regulators and that could take at least a year. Until then, it’s unlikely that Dish will change much. You can expect basically the same service, including billing options, that you get today. If the sale is approved, which I believe is likely, then DIRECTV will take steps to integrate the two companies as smoothly as possible. My guess is that the biggest change will be branding and programming lineups. (In other words, don’t expect DIRECTV to replace your dish with a DIRECTV dish.) DIRECTV will want the Dish audience to have a similar set of channels and prices although it might tinker with that somewhat based on differences among Dish subscribers. (Dish has more rural subscribers than DIRECTV.)

How Will DIRECTV Be Different Under TPG?
AT&T also announced on Monday that it was selling its remaining 70 percent stake in DIRECTV to TPG, the private equity firm. Then, less than an hour later, DIRECTV announced that it has agreed to buy EchoStar’s video assets including Dish’s satellite TV service and its live streaming service, Sling TV. There are two important things to remember here. One, the AT&T-TPG deal, which would give the latter 100 percent ownership of DIRECTV, is not expected to be completed until the second half of 2025. Two, the DIRECTV-Dish deal must be approved by federal regulators and that could take more than a year. So, don’t expect any major changes with both TV services until the deals are officially done.

However, when they are, and I expect they will be, I don’t foresee TPG running DIRECTV significantly differently as the sole owner. The private equity firm already had considerable influence over how the TV provider operates so it’s not likely it has plans for a major change. TPG is dedicated to generating cash and increasing value for the company. And that’s been the priority of the current executive team for DIRECTV. So, it will be business as usual, albeit with a bigger audience when the Dish sale is approved.

I will add that the AT&T sale to TPG is interesting because it stretches out the payments to the telco through 2029. Does that mean that TPG believes it has a five-year window for DIRECTV to be a successful cash-producing company? Not necessarily. But if TPG isn’t successful rebuilding DIRECTV as a streaming company combined with a satellite service that offers cheaper, slimmer TV packages, I could see it start to bring down the curtain at the end of the decade.

Will DIRECTV Stream Replace Sling TV?
The deal is likely to take a year or more before federal regulators approve it. But if it is approved, what will happen to the two streaming services, DIRECTV Stream and Sling TV. Will they become one? The answer is likely yes with Sling TV being replaced by DIRECTV Stream. You might say that Sling’s customers will bolt because DIRECTV Stream is more expensive than Sling, but I’m sure that DIRECTV Stream would offer a package or two that would be comparable to Sling’s $40 base plan. (DIRECTV Stream’s base plan now costs $80 a month.) Sling has been treading water in the last few years with a small decline in overall subs. So it’s unlikely that DIRECTV would see a significant benefit in keeping the brand name alive.

Will Dish Start Carrying Regional Sports Networks? 
As of now, Dish does not carry any regional sports networks (RSNs). But DIRECTV has prided itself on being known as a ‘sports leader,’ carrying most RSNs and national sports channels (not to mention being the exclusive carrier of the NFL Sunday Ticket for nearly three decades until Google took over last year.) As the new owner of the only satellite TV service in the nation, I strongly expect DIRECTV will begin offering RSNs to the Dish audience as well. (I also predict that DIRECTV will rebrand Dish as a DIRECTV service.)

Wil There Be Fewer Carriage Disputes?
As for carriage disputes, DIRECTV will wield more power with a combined audience of nearly 20 million subscribers. That should help it negotiate better terms with programmers although that doesn’t mean there won’t be a few blackouts along the way. DIRECTV has proven (via the recent disputes with Nexstar and Disney) that a blackout may sometimes be necessary to get what it wants.

Will the Dish Sale Improve Service For DIRECTV Subscribers?
I say yes because DIRECTV would now have nearly 20 million subscribers if the deal was completed today. That would make it the largest multi-channel pay TV unit in the nation and that would give it significantly more leverage in carriage negotiations. With that new power, DIRECTV should be able to negotiate better terms and flexibility (see the Disney deal) that would enable it to offer slimmer, less expensive programming packages. It remains to be seen how long DIRECTV will be able to wield that extra power. The satcaster has lost at least 14 million subscribers in the last nine years due to cord cutting (and AT&T mismanagement.) So it’s likely that its subscriber totals will continue to melt. But for at least a few more years, it should help the company better manage its resources and offerings.

How Will the Sale Affect U-verse Subscribers?
The sale prompted a handful of U-verse subscribers to ask The TV Answer Man how the two sales will impact U-verse subscribers. It’s a logical question since AT&T’s infrastructure has been used to deliver U-verse service. Well, there are three things to keep in mind here.

One, U-verse is owned by DIRECTV, not AT&T.

Two, it may be a year before the two deals officially close.

Three, DIRECTV did not mention U-verse in its sale presentation to investors or its press announcement. That doesn’t mean U-verse isn’t part of its future. It means that if U-verse was being left out of the deal, it likely would have been reported.

So, as of now, it’s business as usual for U-verse and its customers. However, it would not surprise me if U-verse closed its doors upon the completion of the AT&T/TPG sale. We don’t know how many subscribers it has now, but AT&T announced several years ago that it would no longer take new customers. So, it can’t be very many still on board. The trouble of continuing service after AT&T bails could supersede any benefit.

Who Could Be Hurt By the Sale?
There is one group that could be hurt by consolidation in the satellite TV industry: Rural residents. It might surprise some journalists and analysts that many Americans still don’t have access to high-speed Internet and/or they can’t afford a decent Internet service. But various studies say that scores of millions, particularly in rural areas, fall into that category. The federal government tried to fix this issue in 2021 with a massive infrastructure bill which included funding for expanding Internet service in rural areas. But like many government projects, the initiative has been delayed by red tape and bureaucratic malfeasance.

So as of now, many rural residents can not subscribe to the multitude of available streaming services, or even subscribe to cable TV. They basically have one option to watch multi-channel TV: satellite TV. And if Dish and DIRECTV become one, their choices will go from two to one. This will make it less likely that DIRECTV will offer discounts and other incentives to get rural residents to subscribe. With no competition, it won’t have to.

This issue is likely to be the major obstacle to the feds approving the merger. I don’t think it’s enough to kill it, but it might require DIRECTV to offer some concessions that would guarantee fair and efficient service in rural areas.

If It’s Such a Good Deal, Why Did AT&T Sell Out to TPG?
DIRECTV CEO William Morrow says the Dish purchase will help DIRECTV reinvent itself — offering slimmer packages at reduced prices — by using the increased clout of the 18 million combined DIRECTV-Dish audience to extract better terms from programmers. So, if that’s true, if the deal is such a good one for DIRECTV, why does AT&T want to exit the company nine years after it first purchased it? Two reasons:

1. The deal will help DIRECTV but likely not prevent its eventual decline.
The Dish sale should enable DIRECTV to be more competitive in the next several years. However, the satellite TV industry is in sharp decline thanks to the explosion of streaming services such as Netflix, Max, Hulu and Disney Plus. Consumers now prefer the convenience of watching a sub-$20 a month streamer over installing a dish on the roof and paying $100 a month. (Fancy that.) There’s still an audience for satellite in rural areas where Internet access is more limited, but even that will start to decline as government funded programs help eliminate the rural Internet gap. For the next handful of years, DIRECTV will be able to maintain a satellite audience, but it will also have to accelerate efforts to convert existing subs to streaming (DIRECTV Stream, DIRECTV Via Streaming) and attract new streaming subscribers. That will not be easy which AT&T understands better than anyone.

2. AT&T has wanted out for the last several years.
AT&T originally thought that the purchase of DIRECTV in 2015 would help it attract new customers for its wireless services. But the plan backfired when DIRECTV began losing subscribers in droves soon after the sale. (DIRECTV has lost at least 14 million subscribers in the last nine years.) The subscriber defections were triggered by a combination of cord cutting and AT&T mismanagement. The telco proved it’s simply not very good at running an entertainment company. So, AT&T has looked for a DIRECTV escape hatch for years and TPG provided one, starting with the 2021 sale of 30 percent of the company and now the remaining 70 percent. The telco can now focus exclusively on its root (and very successful) business – wireless service.

Does the Sale Come Too Late to Save DIRECTV?
Did it come too late for DIRECTV to survive indefinitely as a TV provider? The two companies have engaged in merger flirting for years as subscriber totals declined, but it took Dish nearing bankruptcy to actually make it happen. Did Dish acquiesce too late for the satellite TV industry as a whole? It says here that the Dish sale should enable DIRECTV to be more competitive in the next several years. However, the satellite TV industry is in sharp decline thanks to the explosion of streaming services such as Netflix, Max, Hulu and Disney Plus. Consumers now prefer the convenience of watching a sub-$20 a month streamer over installing a dish on the roof and paying $100 a month. (Fancy that.) There’s still an audience for satellite in rural areas where Internet access is more limited, but even that will start to decline as government funded programs help eliminate the rural Internet gap. For the next handful of years, DIRECTV will be able to maintain a satellite audience, but it will also have to accelerate efforts to convert existing subs to streaming (DIRECTV Stream, DIRECTV Via Streaming) and attract new streaming subscribers.

By eliminating Dish as competition, and taking its subscribers to boost its negotiating power, DIRECTV will have a slightly bigger window to carve out a new niche in the industry. But with satellite TV soon to become a footnote in TV history, the time is short, perhaps just three to five years, before DIRECTV will have to make the transition to a largely all-streaming company. Prior to the Dish sale, I would have said DIRECTV had half that time to do it so that should tell you the importance of the deal.

Is There Anything That Could Stop the Dish Sale?
Yes. two things.

1. The Federal Government
The U.S. Department of Justice and the Federal Communications Commission will have to approve the sale. The last time (2002) that DIRECTV and Dish tried to merge, the FCC nixed it on the grounds that it was anti-competitive. The video landscape is dramatically different now with dozens of streaming services offering more choices than ever. Plus, both DIRECTV and Dish have lost nearly 20 million subscribers combined over the last nine years. But you never know. Federal regulators could still decide to rule against the sale although I don’t expect they will.

2. Dish’s Creditors
Bloomberg News reports that some Dish creditors are organizing to block the sale unless they get better terms when DIRECTV takes over Dish’s $10 billion debt. The news service says Dish’s bondholders could lose $1.6 billion via the deal and they might withhold authorization for the sale if their concerns are not alleviated. I suspect all parties will find a solution here because otherwise it’s likely that Dish would have to declare bankruptcy, leaving the creditors with even less money. But, again, you never know.

The TV Answer Man will answer more questions about the DIRECTV-Dish deal. If you have a question, send it to The TV Answer Man at swann@tvanswerman.com Please include your first name and hometown in your message.

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.