Oh! DirecTV and Dish won't merge after all

So much for that dream. DirecTV was going to buy EchoStar (which includes Dish Network) and become the U.S.’s largest pay-TV provider, a move that would make the megacorp perhaps television’s last bastion against the ever-encroaching streaming business. But, just like the last time the two companies attempted it in 2002, this merger just isn’t going to work out. The prospect of a Dish/DirecTV combo is starting to look like Lucy pulling the football before Charlie Brown can kick.

The whole reason Dish was pursuing a sale is because the company is utterly riddled with debt; DirecTV was going to buy Dish for $1 and assume its debt of $9.75 billion. Presumably, everyone knew those figures going in, but according to The Wrap DirecTV made a revised offer in October that “could have lowered the minimum loss on $8.9 billion of bonds by $70 million, to $1.5 billion.” Dish rejected the offer. 

“While we believed a combination of DIRECTV and DISH would have benefitted all stakeholders, we have terminated the transaction because the proposed Exchange Terms were necessary to protect DIRECTV’s balance sheet and our operational flexibility,” Bill Morrow, CEO of DirecTV, said in a statement. “DIRECTV will advance our mission to aggregate, curate, and distribute content tailored to customers’ interests by pursuing innovative products and providing customers with additional choice, flexibility, and control. We are well positioned for the future with a strong balance sheet and support from our long-term partner TPG.”

When DirecTV first tried to acquire Dish Network back in 2002, it was blocked by the Justice Department on anti-monopoly grounds. The idea of a merger reportedly floated around again in 2020, but federal regulators were still against it. This time, the merger was expected to be approved by the DOJ and FCC simply because satellite television is in such a weak position now that concerns about harming competition don’t even really apply anymore. But the acquisition didn’t even make it to the approval stage since DirecTV terminated the deal. Despite its serious debt problem, EchoStar CEO Hamid Akhavan said earlier this month that the company still has a path forward even without DirecTV, according to The Wrap.