Private Equity Group Looking to Acquire DirecTV and Dish Network

Private equity firm Apollo Global Management is reportedly negotiating to acquire AT&T’s satellite TV service, DirecTV, along with competitor Dish Network.

The complicated transaction would enable AT&T to offload about $20 billion in debt, while maintaining control of the satellite service. It would also allow Dish Network CEO Charlie Ergen to unload the company’s declining pay-TV business, according to Fox Business, which first reported the story based on information from sources familiar with the situation.

Ergen, who has recently moved the company’s focus toward wireless networks and 5G, has made no secret his desire to combine the two satellite businesses.

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AT&T, which acquired DirecTV in 2015 for $49 billion, also purchased Time Warner for $85 billion, sending its debt load into the stratosphere.

Apollo, which has about $250 billion in its asset portfolio, would provide financing for the deal in exchange for a minority stake in the combined entity. The firm specializes in leveraged buyout transactions and purchases of distressed securities involving corporate restructuring, special situations, and industry consolidations.  Its holdings include Caesars Entertainment Corporation, CareerBuilder,  ADT and Rackspace.

AT&T told Fox it has received the offer but that there were no active discussions at this time.

COO John Stankey, who is also CEO of WarnerMedia, last month reiterated AT&T’s support DirecTV and over-the-top video unit, AT&T TV Now.

“We’re constantly looking at the [business] portfolio,” Stankey told The Wall Street Journal. “That’s the normal course of business and it’s not unique to DirecTV.”

 

AT&T Reportedly Considering Spinning Off DirecTV or Merging Unit With Dish Network

Facing mounting mergers-and-acquisition debt, criticism from an activist investor and changing consumer habits toward pay-TV, AT&T is reportedly considering spinning off its DirecTV subsidiary or combining it with competitor Dish Network.

The Wall Street Journal, citing sources familiar with the situation, said CEO Randall Stephenson is exploring the option despite telling an investor event this week he still the supports the satellite TV business AT&T acquired in 2015 for $49 billion.

While nothing could come of the situation, Dish co-founder/CEO Charles Ergen Sept. 17 told the same investor group he welcomes merging the two satellite providers. Ergen tried pursuing DirecTV in 2014, but lost out to AT&T.

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Indeed, with 12 million subscribers — largely buttressed by standalone online TV service Sling TV — Dish would benefit from consolidation. AT&T has projected it would lose more than 1.4 million satellite subs in 2019, including rebranded DirecTV Now (AT&T TV) online subs.

However, when the former parents of Dish and DirecTV considered merging in 2001, federal regulators quashed the idea on antitrust issues.

The Trump Administration is still licking it wounds from a failed attempt to block AT&T’s acquisition of Time Warner — a move some observers contend was largely based on politics involving the president’s dislike of Time Warner subsidiary CNN.

How that would impact a Dish/DirecTV combination is anyone’s guess.

“From a regulatory perspective, it hasn’t been successful and I don’t know that there is any change in that regulatory perspective,” AT&T CFO John Stephens said recently. “I understand the industrial logic, but quite frankly it’s been tried and has been rejected.”

Dish Chairman Charlie Ergen: Streaming Video ‘Bloodbath’ Coming

With a slew of new subscription streaming video services about to enter the market, Dish Network co-founder/chairman Charlie Ergen believes the competition to establish market share against Netflix, Amazon Prime Video and Hulu, will get intense.

Speaking Sept. 17 at the 28th annual Goldman Sachs Communacopia confab in New York, Ergen said the landscape “is going to be a bit of a bloodbath for a while,” as services fight for content licenses and lure consumers with loss-leader subscription plans.

While no stranger to digital distribution, Dish Network was a pioneer launching Sling TV in 2015 featuring the first standalone access to ESPN and other premium pay-TV channels.

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“The game now is to load up your [content] channels and get as much shelf space as you can, while you undercut them [pay-TV] with your direct-to-consumer offering,” Ergen said.

Sling TV ended the most-recent fiscal period with almost 2.5 million subscribers. Dish, which buttresses ongoing pay-TV sub losses with online TV, is pivoting with a strategic move into wireless distribution.

In a shrewd deal, Dish helped facilitate T-Mobile/Sprint merger anti-trust issues with regulators by getting the two telecoms to sell prepaid wireless service Boost Mobile and related spectrum assets to the satellite TV operator for $5 billion.

The prepaid businesses, including Boost Mobile, have about 9.3 million customers in all 50 states and Puerto Rico.

“Sling TV is a long-term play with technology that will pay dividends for us, particularly as we go into wireless,” Ergen said.

Dish will activate all new wireless customers on the New T-Mobile network. Existing prepaid customers will be supported on the Sprint legacy network and will eventually transition to the New T-Mobile network.

“These developments are the fulfillment of more than two decades’ worth of work and more than $21 billion in spectrum investments intended to transform Dish into a connectivity company,” Ergen said. “Taken together, these opportunities will set the stage for our entry as the nation’s fourth facilities-based wireless competitor and accelerate our work to launch the country’s first standalone 5G broadband network.”

Magnolia Pictures’ SVOD Genre Channels ‘Monsters & Nightmares,’ ‘DOX’ and ‘Warriors & Gangsters’ Bow on Dish

Home entertainment distributor Magnolia Pictures Sept. 12 announced it is now offering its digital streaming service, Magnolia Selects, and three genre-specific viewing channels on pay-TV operator Dish Network. Magnolia Selects offers critically-acclaimed libraries of independent movies.

Magnolia Pictures’ standalone channels, including “Warriors & Gangsters,” “DOX” and “Monsters & Nightmares,” provide a curated collection of movies and TV series highlighting the best in action, documentaries and horror for those with an appetite for genre-specific offerings.

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Showcasing top indie and award-winning filmmakers, Hollywood’s biggest stars and more for diverse film viewing audiences, Magnolia Selects is available for $4.99 per month and each channel (“Warriors & Gangsters,” “DOX” and “Monsters & Nightmares”) will be available for $2.99 per month via Dish’s On Demand Subscriptions and the Dish Anywhere app.

Magnolia Selects is also available via Dish’s online TV platform Sling TV, Aamazon Prime Video Channels and Roku, and for download through iOS and Android.

“With Magnolia Selects’ latest expansion on Dish, our films have the ability to reach new audiences on more platforms than ever before,” Eamonn Bowles, president of Magnolia, said in a statement.

Magnolia Selects films, include Lars von Trier’s drama, Melancholia, starring Golden Globe nominee Kirsten Dunst and Golden Globe winner Alexander Skarsgård; World’s Fastest Indian, the inspiring true story from director Roger Donaldson, starring Academy Award winner Anthony Hopkins; the fan-favorite comedy, Goon, starring Seann William Scott; Christopher Coppola’s 1993 crime drama, Deadfall and Magic of Belle Isle, starring Academy Award winner Morgan Freeman.

The latest titles added to the collection of films include Alive and Kicking, a high-spirited look inside the resurgence of the international swing dance community; Great Buck Howard, starring Academy Award nominee John Malkovich; Boarding Gate, from French filmmaker Olivier Assayas and Red, the riveting drama starring Golden Globe nominee Brian Cox.

Curated from Magnolia Pictures’ film library, each standalone channel caters to the specific viewing needs of audiences.

Fans can immerse themselves in the “Warriors & Gangsters” channel, featuring a collection of adrenaline-pumping, fist-pounding, bone-breaking excitement and thrills with films including the Ong Bak trilogy, 13 Assassins, Centurion, Black Death, Hammer of the Gods and Skin Trade.

The “Monsters & Nightmares” channel highlights the best horror, thriller, sci-fi and nightmare inducing movies, such as All Good Things, Let the Right One In, Tucker & Dale vs Evil, Shrooms, V/H/S Viral, Grand Piano, Honeymoon and Rubber, while “DOX” showcases exceptional documentaries and docuseries from some of the most renowned filmmakers around the world, including Enron: The Smartest Guys in The Room, Food Inc., Jiro Dreams of Sushi, Man on Wire, Muscle Shoals, Cocaine Cowboys, Fracknation and No Place on Earth.

FilmRise Adds Free Content to Sling TV

FilmRise July 28 announced it has partnered with Dish Network’s online TV service, Sling TV, to add free ad-supported content to the service.

Sling TV subscribers using Roku devices will be able to watch programming from the New York-based distributor even if they are not a FilmRise base service subscriber.

Sling Orange and Sling Blue subscribers will automatically see FilmRise available as a channel in their channel guide, and Sling users on Roku devices can access the content by opening the Sling app and selecting “browse as guest” option.

“Sling provides consumers with their favorite TV programming and now, with this new offering, they can further their audience’s options without viewers’ payment commitment,” Danny Fisher of FilmRise said in a statement. “It’s a win-win for all.”

FilmRise titles available on Sling TV include, series “Forensic Files,” “Hell’s Kitchen,” “Unsolved Mysteries,” “3rd Rock from the Sun,” and “Kitchen Nightmares.” Movies include Bernie, The Illusionist and the “Ernest” franchise, among others.

The pact comes as Sling TV has seen subscriber growth cool. It added just 48,000 subscribers in the most-recent fiscal period to end the period with 2.47 million subs — four years after launching.

Dish Adds 48,000 Sling TV Subs in Q2

Dish Network may be getting into the wireless business, but in the meantime, it remains a pay-TV operator.

The company July 28 announced it added 48,000 net Sling TV subscribers in the second quarter ended June 30. That compared to a gain of 41,000 subs in the previous-year period.

Sling TV, which ushered in the standalone online TV market in 2015, ended the quarter with 2.47 million subs – up 128,000 subs from 2.34 million subs last year.

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“The increase in net Sling TV subs was primarily related to higher Sling TV sub activations, partially offset by increased competition, including competition from other OTT service providers,” Dish wrote in the fiscal filing.

Separately, Dish’s legacy satellite pay-TV service continues to lose customers. It lost 79,000 net subs, which was an improvement over 192,000 subs lost during the same period last year.

Dish ended the quarter with 12.03 million subs — down 965,000 subs from 12.99 million subs in the previous-year period.

The company has lost 290,000 satellite TV subs in the first six months of the 2019 fiscal year. That compared to a loss of 245,000 subs during the same period in 2018.

“The decrease in pay-TV subs resulted in fewer Dish TV subscriber losses and higher net Sling TV subscriber additions,” Dish wrote.

Regardless, the steady downward spiral in pay-TV subscribers contributed to a near 28% decline in Q2 net income at $317 million from $438 million last year.

Revenue declined 7.5% to $3.16 billion compared to revenue of 3.42 billion last year.

Dish Network Entering Wireless Mobile Market

Where are those Blockbuster Video stores now?

Dish Network is becoming the nation’s fourth wireless carrier following the Department of Justice’s approval of T-Mobile’s $26.5 billion acquisition of Sprint.

In a shrewd deal hammered out by Dish co-founder/chairman Charlie Ergen, the satellite TV operator helped facilitate the merger’s anti-trust issues with regulators by getting T-Mobile and Sprint to agree to sell prepaid wireless service Boost Mobile and related spectrum assets for $5 billion.

The prepaid businesses, including Boost Mobile, serve approximately 9.3 million customers in all 50 states and Puerto Rico.

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At close, Sprint’s prepaid businesses and customers will immediately move to Dish, as will the more than 400 employees and nationwide independent retail network that supports more than 7,500 retail outlets.

Dish’s asset acquisitions from Sprint include a $1.4 billion purchase of Sprint’s prepaid businesses, and a $3.6 billion agreement to purchase Sprint’s nationwide 800 MHz wireless spectrum. The spectrum purchase is expected to be completed three years after the closing of the acquisition of the prepaid businesses.

Dish will activate all new wireless customers on the New T-Mobile network. Existing prepaid customers will be supported on the Sprint legacy network and will eventually transition to the New T-Mobile network.

“These developments are the fulfillment of more than two decades’ worth of work and more than $21 billion in spectrum investments intended to transform Dish into a connectivity company,” Ergen said in a statement. “Taken together, these opportunities will set the stage for our entry as the nation’s fourth facilities-based wireless competitor and accelerate our work to launch the country’s first standalone 5G broadband network.”

Indeed, Dish acquired bankrupt Blockbuster Video in 2011 largely to transition the home video chain’s stores into future mobile wireless retail centers. That plan never materialized after Dish shuttered all company owned Blockbuster stores in 2013.

“As a new [satellite TV] entrant [in 1995], Dish encountered many skeptics who questioned our ability to succeed,” Ergen said. “But, customers loved the disruption we brought to the marketplace with innovations such as a 100% digital experience, local-into-local broadcast, the DVR and ad-skipping. As we enter the wireless business, we will again serve customers by disrupting incumbents and their legacy networks, this time with the nation’s first standalone 5G broadband network.”

The Sprint asset transactions are subject to customary conditions, including the closing of the Sprint and T-Mobile merger, government approvals, and confirmation that Dish is able to provision customers on the New T-Mobile network.

Closing is expected within three months following the completion of the Sprint and T-Mobile merger.

Dish Bows 4K HDR-Compatible Streaming Stick

Dish Network’s AirTV subsidiary July 15 announced the launch of a 4K HDR compatible streaming stick, powered by Google’s Android TV operating system.

The palm-sized $79.99 AirTV Mini device integrates Sling TV, Netflix and other over-the-top apps, in addition to OTA digital channels when paired with a compatible antenna and a Wi-Fi-enabled network tuner.

“The AirTV brand is committed to making local TV relevant and easily accessible to streamers,” Mitch Weinraub, director of product development for AirTV, said in a statement.

Users simply plug the AirTV Mini into their television’s HDMI port to access the user experience. Once connected, the device will launch directly into the Sling TV app and users will see Netflix integrated into the Sling TV user interface.

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AirTV Mini users also have access to third-party apps available from Google Play. Local channel availability depends on geographic location and antenna quality and placement.

The streaming stick supports Google Assistant via a dedicated button on the remote to get answers about the weather forecast, game scores or traffic and control smart home devices like lighting and thermostats. Users can also press a Netflix button on the remote to launch the Netflix app for an easy and seamless streaming experience.

The remote also has the ability to control televisions and sound bars, and features a prominent Sling TV shortcut button and a voice search button to find favorite shows and movies.

Voice controls are app-sensitive and allow users to find a specific show or movie within the app they are using, or make commands such as “go to guide,” “show me my DVR” or “rewind 10 seconds.”

AirTV Mini is equipped with a remote finder button, allowing users to locate a misplaced remote with the touch of a button.

For a limited time, new and eligible existing Sling TV customers can receive the AirTV Wi-Fi-enabled network tuner with an indoor antenna free when they prepay for three months of Sling TV (subscription must be $25/month or greater).

Magnolia Pictures Bows Streaming Service, Branded Channels on Sling TV

Magnolia Pictures July 10 announced that its streaming service, Magnolia Selects, and three branded genre-specific channels have launched on Sling TV — Dish Networks’ online TV platform.

The home entertainment distributor launched in 2001 by Mark Cuban and Todd Wagner’s 2029 Entertainment, offers critically acclaimed libraries of indie movies.

Magnolia channels “Warriors & Gangsters,” “DOX” and “Monsters & Nightmares,” offer a curated collection of action, documentaries and horror cult films. They are available to Sling subscribers for an additional $3 monthly per channel.

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Magnolia Selects is available for a $5 monthly surcharge.

“By teaming up with Sling TV, Magnolia Selects can continue to be the go-to destination for fans of independent film and premium content,” Eamonn Bowles, president of Magnolia Pictures, said in a statement. “We’ve found a new innovative way to ensure our subscribers have accessibility to our curated library of critically-acclaimed films through Sling TV’s flexible platform and personalized streaming service.”

Magnolia Selects titles include Oscar-winning documentary Man on Wire; Swedish horror film, Let the Right One In; Oscar-nominated documentary from Alex Gibney, Enron: The Smartest Guys in The Room and Andrew Jarecki’s true crime story, All Good Things.

Additional content include comedies Tucker & Dale vs Evil and Goon, starring Seann William Scott, alongside the martial arts masterpiece 13 Assassins from director Takashi Miike.

The “Warriors & Gangsters” channel features films such as Ong Bak, 13 Assassins, Kingdom of War and Troll Hunter.

“Monsters & Nightmares” channel titles include The Host, The ABC’s of Death and Survival of the Dead, while “DOX” documentaries and docuseries include Food Inc., The Wolfpack, Iris and Best of Enemies.

Dish Promotes Paul Orban to CFO

Dish Network July 2 announced it has promoted Paul Orban to EVP and CFO. Orban, a 23-year veteran at the satellite TV operator, had served as SVP, chief accounting officer, principal financial officer and controller. Orban continues to report to Dish CEO Erik Carlson.

Paul Orban

“Paul has been with us virtually every step of the way, having joined Dish weeks before we signed our first customer,” Carlson said in a statement. “His encyclopedic knowledge of every aspect of our business, its finances and its strategic vision has made him an indispensable counselor to me and an outstanding leader to our business.”

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Orban joined Dish in 1996 as a member of the financial reporting team. He has held various positions with increasing responsibility, including director of accounting and VP of accounting.

In 2006, Orban was named SVP and corporate controller. He also served as SVP and corporate controller at EchoStar Corp. from 2008 to 2012. 

Before joining Dish, Orban was an auditor at Arthur Andersen LLP. He holds his Bachelor of Science in accounting from the University of Colorado in Boulder.