DirecTV to Buy Fellow Satellite Provider Dish for Just $1
By Movieguide® Contributor
DirecTV and Dish Network are merging in an effort to combat their many streaming rivals.
“DIRECTV operates in a highly competitive video distribution industry,” Bill Morrow, Chief Executive Officer of DIRECTV, said in a statement about the merger. “With greater scale, we expect a combined DIRECTV and DISH will be better able to work with programmers to realize our vision for the future of TV, which is to aggregate, curate, and distribute content tailored to customers’ interests, and to be better positioned to realize operating efficiencies while creating value for customers through additional investment.”
Hamid Akhavan, the President and Chief Executive Officer of EchoStar, Dish’s parent company, echoed Morrow’s statement, saying, “This agreement is in the best interests of EchoStar’s customers, shareholders, bondholders, employees, and partners.”
“We expect DISH and EchoStar bondholders to benefit from two companies with stronger financial profiles and more sustainable capital structures,” he continued.
In addition to helping each other stay afloat as they compete with streamers, this merger will also help Dish rid itself of its substantial debt.
“Under the deal, DirecTV will pay Dish’s owner, EchoStar, just $1 for Dish in exchange for assuming its billions of dollars in debt,” CNN reported. “Dish currently has a $2 billion debt maturity coming up on November 23. To secure funding through a shared revenue stream, TPG and DirecTV will provide Dish with a $10 billion loan that will allow the company to pay off its maturity on November 24.”
Part of the merger includes Dish’s SlingTV, a live TV streaming service that has been competing with Hulu’s live TV and YouTube TV. DirecTV has also stated it will start developing its own streaming services.
MSN reported that EchoStar “will retain control of Dish’s 5G cellular business through the Boost Mobile brand,” explaining that the sale of Dish will “free up resources so it can invest in becoming a major player in the cellular market.”
This isn’t the only major move DirecTV has recently made to keep up with their streaming rivals. Movieguide® previously reported on the network’s disagreement with Disney:
DirecTV and Disney are still struggling to come to an agreement as they continue carriage renewal discussions.
“They have not engaged in earnest on proposals we’ve made to them,” Justin Connolly, President of Disney Platform Distribution, told Deadline, referring to talks about customized channel packages. “They’re trying to lay the blame for their lack of investment in their platform at the feet of programmers.”
However, Chief Content Officer of DirecTV Rob Thun says negotiations have been influenced by the recent shut-down of Disney’s joint sports-streaming platform Venu, launched in partnership with Fox and Warner Bros. Discovery.
“I think they thought they would just waltz through the trial and go on their merry way,” Thun said. “They planned to box everybody out.”
Connolly told The Hollywood Reporter DirecTV is “trying to spin and push this narrative that they want to explore more flexible, skinnier bundles, and that we refuse to engage on that, and bottom line: That is blatantly false.”
“I also think that they’re trying to spin this narrative around DirecTV being a public service for the consumer,” he continued. “But the reality is, DirecTV is a private equity play, and this isn’t a public service for them.”
