Tag: Corporate Mergers

Report: Dish, DirecTV Merger Getting Second Wind

U.S. satellite-based pay-TV operators Dish and DirecTV have oft been the speculation of a merger, with politics and government regulation impeding a deal. But with the satellite TV market continuing to decline due to ongoing consumer migration toward over-the-top video, the competing companies reportedly are keen again to consummate an agreement.

Indeed, DirecTV has seen a 40% drop in subscribers to 15 million from 25 million subs in 2017. Dish ended its most-recent fiscal period with 8.4 million subs — down from almost 9 million subs in the year-ago period.

DirecTV parent AT&T last year spun off a minority stake (and operational control) of the satellite operator, online platform AT&T TV and cable service U-verse to private equity firm TPG Capital for $8 billion. The consolidated companies were then rebranded DirecTV Stream.

“TPG is driving the conversations. They want their investment back,” a source close to the negotiations told The New York Post.

Dish founder/CEO Charlie Ergen has long advocated for a merger of the two companies — albeit on his terms.

“In terms of DirecTV and Dish, I mean obviously I think that those two companies go together, that’s inevitable,” he said on Dish’s most-recent fiscal call.

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Ergen believes that in the current market, regulatory concerns have been minimized due to the continued rollout of broadband nationwide and ongoing competition from programmers themselves launching streaming platforms. In 2020, the DOJ reportedly quashed a merger between DirecTV and Dish, citing 5G’s sputtering rollout nationwide.

The next-generation wireless format is seen as a competitive alternative against any possible satellite TV market control DirecTV and Dish might wield.

“I think it’s a timing issue more than anything else,” said Ergen, who reportedly wants a seat at the head of the table of the merged distributors.

Regardless, with satellite distribution dying in the U.S., a combined DirectTV/Dish unit would be preferred, especially for rural and RV customers dependent on satellite service.

“The FCC and DOJ would likely both conclude that having one strong satellite competitor is better than none at all — and the future is not terribly bright even together, but especially alone,” Craig Moffett, analyst with MoffettNathanson, told The Post.

AT&T CEO: Congressional Concerns Over WarnerMedia Sale ‘Unfounded’

On the heels of concerns from some Democrat lawmakers regarding AT&T’s $43 billion minority stake asset sale of WarnerMedia to Discovery, the telecom’s CEO said the issues presented by lawmakers are “unfounded,” but expected for a mega merger that includes Warner Bros., HBO and Turner and the parent of HGTV and other media brands.

Rep. Joaquin Castro (TX), Sen. Elizabeth Warren (MA), Rep. David Cicilline (RI), Rep. Pramila Jayapal (WA) and 29 other Congressional members sent a letter to the U.S. Attorney General Merrick Garland asking the DOJ to examine whether the merger would reduce diverse content in a more consolidated and less competitive market.

“I believe the context of our discussion with regulators up to this point has centered around those [diversity] issues, and we feel very good about the data we put on the table that have, it’s clearly indicated that there’s nothing unusual about this transaction,” Stankey told the UBS Global TMT Virtual Conference on Dec. 6.

Castro contends there remains a lack of diversity of people of color in media. The lawmaker cited a 2021 analysis by the Latino Donor Collaborative found that Latinos account for less than 3% of TV show leads, showrunners and directors.

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“Latinos are nearly 20% of the U.S. population, one-in-five Americans, but we’re almost invisible on-screen and behind the camera,” Castro wrote in the letter.

Stankey said issues involving minority representation may have been relative to past media mergers, but not so today.

“I would also tell you that those [Congressional] letters … are not very strong in the foundation of their concerns, nor do I have concerns about what they’re articulating in terms of our ability to navigate through that,” Stankey said.