Are DIRECTV & Dish Playing a Game of Bluff With the Creditors?

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, what is up with the DIRECTV-Dish deal? Is DIRECTV really going to walk away from this deal after years and years of merger flirting? — Steve, Fairfax, Virginia. 

Steve, several news services, including Bloomberg News, are reporting that DIRECTV plans to cancel its agreement to buy Dish and Sling TV unless Dish’s creditors agree to a debt exchange by November 22. DIRECTV agreed on September 30 to purchase its rival services for $1. However, the deal also includes DIRECTV assuming Dish’s debt which is around $10 billion.

The problem is that Dish’s creditors say the transaction would cost them as much as $1.6 billion and they have rejected Dish’s proposal to reduce the loss by $70 million, according to Bloomberg. DIRECTV says the deal is contingent on Dish resolving the debt problem.

“A successful exchange was a condition for acquiring the Dish video business. Given the outcome of the (Dish) exchange, DirecTV will have no choice but to terminate the acquisition of Dish by midnight on Nov. 22,” a DIRECTV spokesman told Reuters.

CNBC reports that DIRECTV will not offer more concessions and that Dish Chairman Charlie Ergen is unlikely to seek a resolution through additional negotiations.

So, what do I think will happen, you ask?

I believe DIRECTV is prepared to walk away from the deal if the creditors don’t relent. But I also believe it’s possible that DIRECTV and Dish are simultaneously playing a game of bluff to push the creditors to accept the current proposal. After all, if the creditors don’t accept the current proposal, they stand to lose far more because Dish will likely declare bankruptcy. The Charlie Ergen-run company is in serious financial trouble and it needs the merger to stan afloat.

The creditors know that. And by alerting the world that it plans to terminate the Dish sale, DIRECTV is putting pressure on them to face reality and get the best deal possible. This could be a case of high stakes poker. (Ergen, the former professional blackjack player, would certainly appreciate the play.)

If that’s the case, we’ll soon see if the gambit works. November 22 is just eight days away.

Have a question about new TV technologies? 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.