DISH CEO Offers Update on Potential Merger With DIRECTV After Losing More Than 300,000 Customers

DISH Network could use some help. The satellite company recently reported losing 348,000 customers in the first quarter of 2024; 213,000 linear subscribers, and another 135,000 from its live TV streaming service Sling TV. For years, discussion of a merger between DIRECTV and DISH has permeated the pay-TV world, and DISH co-founder Charlie Ergen went as far as to call such a transaction “inevitable” in 2022. Ergen wasn’t available during the most recent quarterly earnings conference call for DISH’s parent company Echostar, but CEO Hamid Akhavan-Malayeri fielded questions about a merger with DIRECTV during the call and gave an update on where the two companies stand regarding a combination.

Key Details:

• Akhavan-Malayeri outlined the company’s efforts to avoid bankruptcy, saying that a declaration is not necessarily a forgone conclusion.
• The CEO also said there is “significant synergy” to be had in a merger with DIRECTV, but stopped short of calling it inevitable.
• If DIRECTV and DISH do merge, the combined company would have an impressive range of pay-TV plans for viewers to pick from.

Akhavan-Malayeri was thrown into the fire a bit during the earnings call, amidst declines in customers, revenue and free cash flow for DISH. When asked to outline the company’s strategy for avoiding bankruptcy, he pointed to building cash reserves back in order to remain a going concern, and reiterated the company’s focus on high-quality subscribers that are less likely to cancel their DISH or Sling plan.

The CEO also had a chance to discuss a potential merger with DIRECTV, the other big-time satellite company in the U.S. The two companies have held off-and-on merger discussions for years, though a break in negotiations seemed to occur last summer, and there have been few public updates since. Akhavan-Malayeri acknowledged there are possibilities in such a transaction, but said his focus is on trying to keep DISH going on its own for the moment.

“I can’t speak how inevitable is,” he said in reference to Ergen’s 2022 comments. “To me, obviously, there’s significant synergy there. When you look at the two businesses being in the same space and both businesses are in a space where we are under attack by the content providers and a number of other challenges. I think that opportunity certainly has always been there and is there. It’s a matter of us getting to finding the right time and economics to look at it.

“And right now, my focus more than anything else is to address the two significant challenges ahead of us. One is, as I mentioned, just immediate financing needs and second is getting our business operationally to the point where [we have] a business that is sustainable and is generating significant economic value. Those two priorities right now are taking, I would say, 99% of my time.”

What Happens to DIRECTV STREAM, Sling TV if the Companies Merge?

A combination of DIRECTV and DISH would create a company with more than 20 million paid subscribers, which would make it the largest remaining cable channel distributor in the United States. It would also leave the new company’s executives to decide on whether or not to continue offering two live TV streaming services Sling TV and DIRECTV STREAM.

The most logical outcome after a merger would be to continue offering Sling as a lower-cost plan of DIRECTV STREAM. Current DIRECTV STREAM subscription options start at a price point of $79.99 per month, and increase as viewers add more options like regional sports networks (RSNs) to their packages. But Sling TV starts at just $40 per month, and DIRECTV STREAM doesn’t offer anything close to that product in terms of price at the moment.

Current Sling customers who wanted to stream their area’s RSN can instantly upgrade to a DIRECTV STREAM offering that carries those channels as well. Sling’s new rewards program could also expand to DIRECTV STREAM customers, helping to boost the number of so-called “high-quality” subscribers that DISH prizes so heavily by giving audiences a tangible reason to stay subscribed.

As Akhavan-Malayeri, there are plenty of opportunities for synergy if DIRECTV and DISH do merge at some point. But his focus remains on keeping DISH an independent, viable company for as long as he can, and is less interested in a merger than he is in trying to preserve the legacy of one of America’s last remaining pay-TV companies.