It’s long been rumored that DirecTV and Dish Network could one day merge. They have, in fact, attempted to merge multiple times over the years, including in 1992 and again in 2002, with neither deal ultimately going through.
When DirecTV’s current owner, AT&T, began attempting to sell of a stake in the satellite service last year, there was speculation that the two satellite firms might try to combine again, with Dish chairman Charlie Ergen calling such a deal “inevitable” on various occasions.
However, the government made clear that no such merger would be approved right away, due to antitrust concerns, and as AT&T took bids for a DirecTV stake, Dish did not appear to be involved in the talks.
But now that AT&T has sold that stake, there are once again rumblings that a satellite merger could be revisited.
AT&T officially announced an agreement last week to sell a 30 percent stake in DirecTV to the private equity giant TPG, in a deal that is expected to close in the second half of 2021. The deal will set up a new business entity, to be called “New DirecTV”- and the structure of it makes it possible that a future Dish tie-up could happen.
UBS analyst John Hodulik raised that possibility in a research note following the TPG deal, as cited by Fierce Video.
“This includes potential satellite video consolidation, which we have long believed is inevitable. While likely not an easy process, the video market has changed significantly since the FCC/DoJ blocked the [DirecTV]/ EchoStar merger in 2002, in our view suggesting a path to potential regulatory approval,” Hodulik wrote.
Per Bloomberg, the same analyst says that regulators might be more amenable to a Dish/DirecTV tie-up now that the latter company is under the joint venture, rather than owned by the telecommunications giant AT&T. Bloomberg also said that a significant amount of cost-cutting is likely once DirecTV is under the control of the joint venture.
It was reported last October by the New York Post that AT&T had been informed by Justice Department regulators that any merger between the two satellite firms “would likely have to wait until faster 5G wireless service is more widely available in rural markets.”
One scenario that was floated had DirecTV and Dish both being spun off into a separate entity, along with private equity firms. However, AT&T was said to have little stomach for another long regulatory fight, after waiting more than a year for its acquisition of WarnerMedia to be approved.
The reported kiboshing of any possible Dish/DirecTV merger was done by the Trump Administration; it’s unclear what views the regulators in the Biden Administration will have on this specific question. The FCC and Justice Department, during the Bush Administration, had rejected the proposed merger in 2002.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.