Will DirecTV and Dish Merge? Satellite TV Operators Are Reportedly Close to a Deal

As the pay-TV sector continues its downward spiral, DirecTV and Dish Network — two longtime rivals that have explored joining up at various times for years — may be headed to the altar.

DirecTV is in talks with EchoStar, Dish’s parent company, to acquire Dish and Sling TV, according to reports by Bloomberg, the Wall Street Journal and CNBC. A deal could be finalized as early as Monday, Sept. 30, per the reports.

Reps for DirecTV and Dish didn’t respond to requests for comment.

The deal is being driven by EchoStar CEO Charlie Ergen’s desire to pay off $1.98 billion of debt that matures in November 2024, CNBC reported. The company’s debt load that has raised the specter of EchoStar seeking a bankruptcy reorganization.

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Past overtures between DirecTV and Dish, dating back to 2001, have faced regulatory hurdles. But today, “It’s hard to imagine that regulators would block a deal. Better to have one [satellite TV operator] than none,” MoffettNathanson principal analyst Craig Moffett wrote in a note to clients last week.

AT&T, which bought DirecTV in 2014, three years ago spun off the satellite TV operator, retaining a 70% and private-equity firm TPG Capital holding 30% of DirecTV.

Moffett noted that the synergies between DirecTV and Dish would “likely be much more limited than you might imagine.” For example, the two companies have no synergies in the satellite fleet because the two use different conditional access (video scrambling) technology. “It’s hard to argue that a merger shouldn’t happen; it clearly should,” Moffett wrote. “Consolidation during a period of secular decline is always to be expected. But it would be a mistake to overestimate its importance. Adding a year or so to the expected life of satellite TV isn’t going to change the narrative for programmers, distributors, or even for satellite TV.”