The DIRECTV-Dish Sale: 5 Ways How DIRECTV Will Benefit

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, can you explain to me why DIRECTV wants to buy Dish with all that debt? What’s the benefit to them? I don’t see it. — Steve, Fairfax, Virginia. 

Steve, DIRECTV announced on September 30 that it was buying Dish’s satellite TV business, and Sling TV, the Dish-owned multi-channel live streamer. The deal must be approved by federal regulators and possibly Dish bondholders. But if it is — and I predict it will be — what’s the benefit to DIRECTV? The sale is only for $1 but DIRECTV must assume roughly $10 billion in Dish debt. Is the sale really worth that?

I believe the answer is yes for five major reasons:

5 Reasons Why DIRECTV Benefits From the Dish Sale

1. DIRECTV can save money by reducing resources and personnel.
DIRECTV will get the revenue from two TV businesses but it will not need to keep the employees from both. For example, it can deliver DIRECTV Stream to Sling TV subscribers and eliminate the team that now runs the latter. The satellite divisions can also be streamlined in both personnel and expenses.

2. DIRECTV can negotiate lower carriage fees from programmers.
As of now, DIRECTV and Dish have almost 20 million video subscribers combined. Even if the two services lose subscribers before the feds approve the deal, it will still be the largest pay TV business in the nation. That will give DIRECTV more leverage to negotiate better terms in carriage disputes.

3. DIRECTV can negotiate increased flexibility in programming offerings.
Likewise, DIRECTV will be able to use its increased leverage to persuade programmers to offer their channels in more flexible bundles. This should help DIRECTV design packages that will entice more consumers to subscribe.

4. DIRECTV eliminates a competitor.
If the sale is approved, DIRECTV will be the only satellite TV service in the nation. That may not sound like a big deal when there are dozens of streaming and cable services available. But in some rural areas, satellite is the only viable TV option because there is either no or limited high-speed Internet service available. DIRECTV should improve its subscriber numbers in those markets.

5. DIRECTV will be assured of a longer shelf life.
With Dish out of the way, and DIRECTV being able to offer more attractive packages, the company should be able to stay in business for at least the next several years. That was not a guarantee before the sale with DIRECTV having lost at least 14 million subscribers in the last nine years due to cord cutting, and let’s be frank, AT&T mismanagement. The increased viability should help DIRECTV attract more subscribers and improve its marketing and advertising efforts as well.

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

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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.