DirecTV announced on Monday that it will acquire Dish Network for $1, concluding years of on-and-off discussions between the two satellite TV rivals.
This merger comes as both companies face growing challenges from streaming services like Netflix, Hulu, and Amazon Prime Video, which have significantly cut into their subscriber bases.
DirecTV will assume Dish’s multibillion-dollar debt as part of the agreement. The deal is also contingent upon Dish bondholders agreeing to lower its net debt below $1.56 billion, a crucial factor that DirecTV aims to secure in the coming weeks. Failure to reach an agreement could push Dish into bankruptcy.
The merger between DirecTV and Dish aims to create a stronger player in a video industry now dominated by streaming services. With millions of customers cutting the cord in favor of cheaper and more flexible on-demand streaming options, traditional satellite and pay-TV providers have found it increasingly difficult to compete. DirecTV and Dish believe their combination will allow them to better negotiate with content creators and offer more competitive packages.
DirecTV, which was founded in 1994 and acquired by AT&T in 2015, had once boasted a peak of over 20 million subscribers. Today, its subscriber base has shrunk to around 11 million. The newly combined DirecTV-Dish entity will serve around 20 million subscribers, still a far cry from its peak.
In addition to the acquisition, private equity firm TPG will purchase AT&T’s remaining 70% stake in DirecTV. The satellite merger is structured as a debt exchange, with DirecTV assuming Dish’s financial obligations, including a $2 billion debt maturity due in November. TPG and DirecTV have also committed to providing Dish with a $10 billion loan to help it address this looming debt.
The merger allows the combined company to leverage greater scale, providing a more stable revenue stream to invest back into its products. Both DirecTV and Dish will continue operating under their respective brands for the time being, meaning that existing Dish customers will not face immediate service changes.
Rumors of a merger between DirecTV and Dish have persisted for years. A previous attempt in 2002 was blocked by the US government due to competitive concerns. However, in the current environment where streaming dominates, and satellite TV is no longer the only option for many rural customers, regulators may be more open to approving the deal.
The transaction offers DirecTV a way to reduce its operational costs while giving EchoStar, Dish’s parent company, an opportunity to address its substantial debt load. EchoStar, which also owns Sling TV and wireless spectrum rights, expects the merger to improve its financial outlook significantly.
The deal still requires regulatory approval and is expected to close by the fourth quarter of 2025.
