DirecTV Acquires Dish TV, Creating 20 Million-Subscriber Powerhouse

DirecTV has agreed to acquire EchoStar’s satellite television business, including Dish TV, in a deal that brings together two of the largest U.S. satellite TV providers. The transaction, announced on Monday, marks the culmination of years of intermittent negotiations between the two companies. According to Reuters, the combined entity will serve around 20 million subscribers, positioning itself as one of the largest players in the rapidly changing pay-TV landscape.

The merger comes at a time when satellite TV services like DirecTV and Dish have been losing ground to streaming giants such as Netflix and Amazon’s Prime Video, which have benefited from shifts in consumer behavior and the increasing popularity of on-demand video. Bill Morrow, CEO of DirecTV, highlighted the competitive advantage of the merger, telling Reuters that the combined company would be able to negotiate more consumer-friendly programming options.

“We believe that consumers don’t want to be the aggregators,” Morrow said, referring to the complex array of streaming services that users currently have to manage individually. “A majority of consumers in the marketplace would not prefer to go out and manage all these multiple accounts.”

The newly-formed company plans to improve the viewing experience by offering a unified platform, making it easier for subscribers to navigate between traditional TV channels and streaming content, as well as manage their subscriptions in one place.

Per Reuters, as part of the acquisition, DirecTV will pay just $1 to acquire the pay-TV business, Dish DBS, which includes Dish and its Sling TV streaming service. However, DirecTV will take on approximately $9.75 billion in Dish’s debt. In an effort to make the deal more attractive to bondholders, Dish and DirecTV are launching a discounted debt exchange offer, with Dish attempting to persuade bondholders to accept a reduction of $1.57 billion.

For the deal to proceed, Dish DBS bondholders must agree to the terms of the exchange, effectively taking a reduced value on the debt. By doing so, Dish hopes to extend its debt maturities while integrating its bondholders into the newly merged company.

This deal, if successful, will reshape the satellite television industry, combining the resources and customer base of two companies that have long battled for market share.