In the satellite TV equivalent of Godzilla and Kong teaming up against Skar King, DirecTV announced it’s buying longtime rival Dish for $1 in a deal that unites the two providers as they fight to maintain relevance in the age of streaming.
The complex deal entails DirecTV buying Dish (and Sling) from its parent company, EchoStar, for $1 and the assumption of nearly $10 billion in debt. At the same time, private equity firm TPG will buy AT&T’s 70% stake in DirecTV for $7.6 billion, giving TPG full ownership of the combined company (it bought the other 30% of DirecTV from AT&T in 2021).
It’s a bid to save the satellites. The two companies have lost a combined 63% of their customers since 2016. The merger will make DirecTV the largest US TV distributor, with 18 million subscribers—a number that CEO Bill Morrow hopes will help it negotiate better deals and offer smaller packages, so customers aren’t forced into paying for the Bob Ross Channel and Disney Junior.
Looking ahead…the deal is subject to regulatory approval—though Morrow said he’s confident that regulators won’t block the merger (which they did the last time the companies tried to merge in 2002)—before DirecTV upholds its promise to investors to cut $1 billion in costs annually. That’s typically corporate speak for layoffs.—CC