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A Dish Network-DirecTV Merger? Don’t Bet On It.

Dish Network HD satellite dish
Dish Network HD satellite dish (DISH 1000+) with a western arc LNB.

For much of the year, it has been a well-known fact that AT&T is looking to offload DirecTV, the struggling satellite TV service for which it paid a whopping $49 billion in 2016. Dish Network, meanwhile, has held out hope that a merger with the service would help the company get out of its years-long economic doldrums. Dish’s CEO Charlie Ergen has even repeatedly stated that he considers a merger of the two satellite TV providers to be “inevitable,” even though such a business deal would likely face significant regulatory scrutiny.

It does appear that an actual sale is creeping closer—but Dish isn’t seen as one of the potential buyers. The Wall Street Journal recently reported that the telecommunications giant has received bids from the auction it’s held for DirecTV—and that such bids have valued the unit upwards of $15 billion including debt, still much less than what the company wrote out a check for just four years ago.

Both Apollo Global Management and the “blank check company” Churchill Capital Corp. IV submitted the bids, with Churchill’s proposal believed to be more than $15 billion and Apollo offering less, according to the report. The paper added that the sale “could be completed by early next year.”

Even with Dish out of the picture, perhaps it is in the best interest for AT&T to close this deal quickly. The company still serves 17.8 million cable customers, most of which are DirecTV subscribers—but that is a huge drop-off from the 25.1 million TV customers who were using its service just a couple of years ago.

Accordingly, revenue for video entertainment plunged to just under $7 billion last quarter, which is 16 percent less than what was registered in 2018.

The future appears just as bleak at Dish Network, which in the third quarter, lost 87,000 subscribers, while Sling TV gained 203,000 subscribers. In the second quarter, the company shed 96,000 video subscribers after dropping more than 400,000 in the first quarter.

The new figures leave Dish with a total of 11.42 million pay-TV subscribers.

There are, however, efforts being made to pivot toward 5G to elevate Dish’s top-line growth for years to come. The company announced on Wednesday that it “plans to offer, subject to market and other conditions, $2 billion aggregate principal amount of convertible notes … (which) are intended to be used for general corporate purposes, including 5G network buildout costs.”

Dish is slated to launch its 5G network in the later part of 2021.

The company earlier this year entered the retail wireless market with its purchase of Boost Mobile for $1.4 billion, a transaction that grew out of the Sprint/T-Mobile merger.

Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

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Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV.

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