DISH CEO: Window for Long-Discussed Merger with DIRECTV Could Open After Midterm Elections

Media corporations are in the midst of releasing their third-quarter earnings reports, and there’s always lots of news when they do. DISH Network recently held its quarterly call with investors and analysts, and CEO Charles Ergen dropped an intriguing tidbit regarding the future of DISH and one of its fiercest competitors in the multichannel video programming distributor (MVPD) marketplace.

Ergen said that he felt that the passing of the midterm elections would give DISH, which owns the live TV streaming service Sling TV, the opportunity to acquire DIRECTV. He explained that during an election cycle, big corporations are often used by candidates to score political points, and a potential merger with DIRECTV will attract less vitriol after the election is over.

“I do think the political environment, when an election is going on … you’re hesitant to be a political football for somebody to complain about big companies or whatever in an election cycle, but that election cycle is over next week,” Erger said. “And then you have a window where I think all companies are looking at [mergers and acquisitions]. You’re probably going to see some increased activity in that sense.”

His comments could mean that DISH is ready to move on a potential deal with DIRECTV quickly following the midterms. Doing so would bring two of the top five MVPD providers in the country under one roof. Such a deal could still bring scrutiny from regulators, but it would not be used as a campaign issue, which is more desirable in Erger’s eyes.

The two satellite providers have been talking about a potential merger for years, and earlier this year, Ergen even said that such a deal was “inevitable.”

After AT&T — DIRECTV’s parent organization — sold off 30% of the company last year, there has been speculation that some sort of partnership, either by merger or acquisition, could be in the cards for the country’s two major satellite television providers.

If DISH and DIRECTV did merge, it would make the company a leader not only amongst pay-TV satellite providers, but in live TV streaming as well. Sling TV is a popular choice among cord-cutters because of its low cost relative to live services like YouTube TV, as well as its wide array of live sports offerings.

That could indicate that if the two companies merge, a lower price point could be in store for DIRECTV STREAM as well. Plans for DIRECTV STREAM currently run from $70 per month all the way to $150. On the other hand, DIRECTV STREAM offers more channels than any Sling plan, so DISH might well decide to keep DIRECTV STREAM as it is and offer customers the option to pay more for more content.

DISH’s hand may be as strong as it’s going to be for the foreseeable future if it wants to make a move on DIRECTV. Sling had a bounce-back third quarter, adding 214,000 customers to bring its total subscriber base to 2.41 million. That’s not a titanic number in the media industry, but it is an improvement over Q2 when the company lost 55,000 customers. The start of the football season has undoubtedly been a big help in boosting Sling’s numbers in Q3, so executives are crossing their fingers that the hemorrhage of subscribers when the season ends isn’t too crippling.

The end of football season might bring an even worse mass exodus of users to DIRECTV, however. This is the final season that the company will have the rights to the NFL’s package of out-of-market games NFL Sunday Ticket. When Sunday Ticket leaves DIRECTV, the company’s valuation will assuredly decline, and it seems that companies like DISH are already looking to take advantage.