DirecTV is acquiring Dish as part of a merger of satellite TV rivals

DirecTV and Dish Network, longtime rivals in satellite television, are poised for a merger. DirecTV announced a deal Monday with Dish parent company EchoStar to acquire Dish in a deal valued at nearly $10 billion – which would create the largest pay-TV provider in the United States.

Under the terms of the purchase agreement, DirecTV will acquire EchoStar's video distribution business, including Dish TV and Sling TV, for a “nominal consideration” of $1 (yes, a dollar) – plus the assumption of the Dish unit's net debt, an aggregate principal amount of about $9.75 billion. The companies expect the deal to close in the fourth quarter of 2025.

Additionally, AT&T announced that it will sell its 70 percent stake in DirecTV for $7.6 billion to TPG, the private equity firm that owns 30 percent of the operator. This deal is expected to close in the second half of 2025; AT&T and TPG said the transaction was not contingent on the completion of the connection between DirecTV and Dish.

The deal requires approval from US authorities, including antitrust approval. Analysts expect a DirecTV-Dish combination to win regulatory approval as the traditional pay-TV business has declined dramatically as consumers have cut the cord and flocked to streaming services. DirecTV CEO Bill Morrow told Wall Street analysts in a call Monday that third-party data showed there would be “no loss of competition” from the merger, even in rural areas of the U.S. “No surprise” to the FTC and the Ministry of Justice.

Together, DirecTV and Dish have about 18 million customers, a total that is 63% below their peak in 2016, the companies said. On Monday, DirecTV said it has about 10 million pay-TV subscribers (including DirecTV Stream and U-verse TV), down from a peak of 25.5 million in late 2016. Dish, which once had more than 14 million customers , ended the second quarter of 2024 with 8.07 million pay TV subscribers (including 6.07 million for Dish TV and 2.0 million for Sling TV). At the end of the second quarter, Charter had a total of 13.3 million video customers across America and Comcast had 13.2 million.

Following the completion of the Dish acquisition, DirecTV will continue to be led by Morrow and CFO Ray Carpenter. The combined company's headquarters will be in El Segundo, California (where DirecTV is currently based).

Morrow said in announcing the deal, “We expect that with increased scale, DirecTV and DISH will be better able to partner with programmers to realize our vision for the future of television, which is to deliver tailored content to collect, curate and disseminate customer interests and be better able to achieve operational efficiencies while creating additional value for customers through additional investments.”

The deal eliminates the possibility that EchoStar would be forced to consider filing for bankruptcy in the face of looming debt repayment. As part of the transaction, TPG Angelo Gordon (TPG's investment unit specializing in credit and real estate investments) and some of its co-investors, together with DirecTV, raised $2.5 billion in financing in November 2024 to “fully refinance” the Dish TV business ready debt maturity of $2 billion. The remaining $500 million in EchoStar will be written off until DirecTV-Dish's expected closing in late 2025. Additionally, as part of the DirecTV acquisition, EchoStar will be able to access up to $1.5 billion in cash from pay-TV unit Dish, “subject to operating agreements.”

DirecTV launched in 1994 and Dish followed in 1996, and the two satellite television companies provided strong competition to established cable television operators. But over the past decade, both companies have seen their subscriber numbers decline millions of times (much like traditional cable TV) as the rise of streaming led to a consumer exodus from the sector. DirecTV and Dish have launched Internet-delivered pay-TV packages, but these have failed to offset losses on the satellite side.

Previous attempts at rapprochement between DirecTV and Dish, dating back to 2001, have faced regulatory hurdles. But today, “it is hard to imagine that regulators would block a deal,” Craig Moffett, principal analyst at MoffettNathanson, wrote in a Sept. 16 note to clients. “It's better to have one [satellite TV operator] than none.”

EchoStar said the deal will “ease a significant portion of EchoStar's financial constraints” and therefore allow it to move toward further expanding its 5G wireless network and strengthening its Boost Mobile brand as the “fourth location-based wireless provider in the US.” focus.

“We plan to win in the mobile business,” EchoStar CEO Hamid Akhavan told analysts in a call Monday.

DirecTV estimates that the merger with Dish has the potential to generate cost savings of at least $1 billion annually (in the third year post-merger). Moffett said the operational synergies between DirecTV and Dish would “probably be much more limited than you can imagine,” and he said a merger of the two would have limited impact on the overall development of the industry. For example, the two companies have no synergies in the satellite fleet because they use different conditional access technologies (video encryption).

By joining forces, DirecTV and Dish can gain some influence in programming distribution discussions. After Disney and DirecTV failed to reach renewals this month, Disney channels including ESPN and ABC stayed off the pay-TV provider's schedule for 13 days; The two sides agreed to a deal on September 14 that includes new bundling options for Disney streaming services for DirecTV.

“It's hard to argue that a merger shouldn't happen; Clearly it should be,” Moffett wrote in the Sept. 16 note. “In times of long-term decline, consolidation is always to be expected. But it would be a mistake to overestimate its importance. Extending the expected lifespan of satellite television by about a year will not change the perspective for programmers, distributors or even satellite television.”

AT&T, which bought DirecTV in 2014, spun off the satellite TV operator three years ago, retaining a 70% stake, while private equity firm TPG Capital held the remaining 30%.

Two years ago, DirecTV suffered a setback when it lost its exclusive contract with the NFL for the Sunday Ticket Premium game package it had offered since 1994. Google signed a seven-year deal with the NFL to sell the package on YouTube beginning with the 2023-24 season; Currently, Sunday Ticket includes all out-of-market regular-season Sunday NFL games broadcast on Fox and CBS.