DIRECTV, DISH Resume Merger Talks: Will It Finally Happen This Time?

Will the two biggest satellite TV distributors in the country become one? That question has floated around in business circles for years, even before DISH chairman Charlie Ergen called a merger between his company and DIRECTV “inevitable” in 2022. A new report from Bloomberg indicates that the two companies are discussing the possibility once again, a consolidation that would come at a highly transformative time for the pay-TV industry.

Key Details:

• Bloomberg reports merger talks are in the “early stages.”
• A combination would allow DISH to continue focusing on the build-up of its wireless network.
• A deal could be easier to get past regulators given the state of pay TV.

Despite the chatter of a merger between DISH and DIRECTV having gone on for years, Bloomberg reports that the two companies are in the “early stages” of deal discussions, and warns that talks could still come to nothing in the end.

If DIRECTV and DISH did merge, the resultant firm would instantly become the largest pay-TV company in the United States, combining the more than 11 million DIRECTV customers with 6.1 million DISH subscribers, and another 2 million from DISH’s live TV streaming service Sling TV.

There was no official confirmation to Bloomberg that deal talks were starting up again. In an emailed statement, DIRECTV told Bloomberg:

“Rumors about a potential transaction involving DirecTV and Dish are nothing new, but we don’t comment on rumors and speculation.”

Reports that talks between the two sides had stalled circulated in 2023, when DISH was still struggling to meet government-mandated 5G requirements for its wireless service. Merging DISH with DIRECTV would allow it to continue its transition to wireless while DIRECTV handles the TV side of the business.

Hamid Akhavan-Malayeri — CEO of DISH’s parent company EchoStar — said earlier this year that there would be “significant synergy” in a merger between DIRECTV and DISH, but also said a deal would be “a matter of us getting to finding the right time and economics to look at it.”

Would Government Block a Merger of DIRECTV and DISH?

The combination of DIRECTV and DISH could face significant scrutiny from government regulators; two of the largest companies in a given industry merging to create the largest outright entity usually creates skepticism at the very least. The Justice Department sued to stop a deal to merge the two satellite giants from happening in 2002, and it would not be a surprise if they did it again.

But 2002 offered a very different pay-TV landscape than it does now. The industry has tens of millions fewer subscribers than it did at its height, and DIRECTV and DISH may be successful in arguing that the integration of their two businesses will not materially lessen competition with big cable companies like Xfinity and Charter Communications.

All such questions will be answered in time, but now that DIRECTV has settled its carriage dispute with Disney, it can shift its focus to more big-picture questions about its future. A merger with DISH could well be in the cards as the two try to navigate a marketplace where customers continue to turn away from expensive pay-TV plans.