November 3, 2022
A possible merger between satellite TV operator Dish and DirecTV remains inevitable according to Dish co-founder/CEO Charlie Ergen. Speaking on a Nov. 2 fiscal call, Ergen said M&A activity between the two companies should ratchet up following the midterm elections.
“You’re hesitant to be a political football for somebody to complain about big companies during an election cycle,” Ergen. “”But that election cycle is over next week.”
Specifically, Ergen believes that post-elections, corporations begin renewing possible M&A strategies with the next political election chatter not occurring for another 15 months.
“If the timing was right [for a Dish/DirecTV] merger, it would be in the near-term rather than the longer term,” he said, adding that the synergies between the two companies remain on the table.
DirecTV is majority owned by AT&T, but operationally controlled by minority owner private investor group TPG Capital (formerly Texas Pacific Group), which acquired the 30% stake (and AT&T TV and U-verse) in 2021 $1.8 billion in cash. AT&T bought DirecTV in 2015 for $48.5 billion.
Both satellite TV operators have been hemorrhaging subscribers for years as consumer sentiment switches transitions toward over-the-top streaming video, including online TV.
“In a declining industry, taking advantage of synergies is a rational strategy,” Ergen said.
He contends any legal objections to the merger have significantly eroded over time with the degradation of the linear TV business and competition from OTT businesses and proliferation of high-speed internet, or broadband.
“There’s not a home in America that can’t get broadband,” Ergen said, adding that the current pay-TV market remains under siege.
“We’ve seen viewership decline 15 years in a row on the networks and [carriage] retransmissions go up by 1,000%. That’s not sustainable,” he said.