Charlie Ergen: Dish Network, DirecTV Merger ‘Probably Inevitable’

With Dish Network and DirecTV losing nearly 4 million combined linear TV subscribers in 2019, it seems just a matter of time before the two satellite TV operators combine operations.

That’s the sentiment coming from Dish CEO Charlie Ergen who is aggressively transitioning his company into a wireless telecommunications provider featuring a nationwide 5G network.

Speaking on the Feb. 19 fiscal call, Ergen said is “probably inevitable” Dish and DirecTV would merge due to ongoing consumer migration away from linear television.

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“Growth in TV is not coming from linear satellite TV providers,” Ergen said.

Indeed, it’s not. DirecTV and AT&T U-verse lost 945,000 subs in the fourth quarter, while Dish lost 194,000, which was an improvement from 338,000 subs lost in the fourth quarter 2018.

Ergen said industry growth is being driven by “huge programmers and trillion-dollar companies” putting immense resources into streaming video. The executive contends over-the-top video has become so pervasive that regulatory issues regarding a possible merger between Dish and DirecTV would be minimal.

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“Obviously there still could be regulatory issues there. And we’ll have to see how that all develops, but [a merger] to me seems, and maybe each company only has two subscribers when you put them together, but eventually those two are probably going to, that’s going to make some sense,” Ergen said. “Because you can’t swim upstream against a real tide of big OTT players.”

While AT&T has 3 million fewer pay-TV subs since acquiring DirecTV in 2015, COO John Stankey contends the pay-TV operator — via high-speed Internet service — is integral to the successful launch of HBO Max.

Stankey has suggested DirecTV suffers competitively by not being able to bundle high-speed Internet to consumers as Comcast does.

“Where we’ve built better broadband, the [pay-TV] business is performing just fine,” he said late last year.

 

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