DirecTV will buy Dish for one buck (plus a lot of debt)

By NewscastStudio

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DirecTV will buy its biggest competitor in a $1 deal that also includes the assumption of a large chunk of Dish and Sling TV‘s debt.

“The combination … will benefit U.S. video consumers by creating a more robust competitive force in a video industry dominated by streaming services owned by large tech companies and programmers,” a statement issued Sept. 30, 2024, by DirecTV reads.

According to the announcement, EchoStar, owner of Dish and Sling, will sell both of those brands to DirecTV for the nominal price of $1 (or 100 cents). 

DirecTV will then assume $9.75 billion of EchoStar’s debt. 

In addition to the Dish transaction, the company also announced that TPG to buy the remaining 70% stake in DirecTV from AT&T. DirecTV, TPG and other investors are also pouring $2.5 billion into refinancing Dish debts set to mature in November 2024.

TPG will invest in DirecTV through TPG Capital, the firm’s U.S. and European private equity platform. The transaction between TPG and AT&T is expected to close in the second half of 2025, subject to customary closing conditions. Completion of this transaction is not contingent on the Dish deal closing.

The proceeds of the funding will be distributed to Dish via a secured inter-company loan to fully repay Dish DBS’ November 2024 debt maturity and for general corporate purposes.

The combined companies are expected to realize at least $1 billion a year in cost savings, though it will likely take at least three years from the date of closing for those savings to show up. 

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DirecTV CEO Bill Morrow and CFO Ray Carpenter will take over leading the new combined company. It was not immediately clear what the new company will be called or if the DirecTV, Sling TV and Dish brands will continue to be marketed.

The deal comes at a time when pay TV operators, including cable companies, are bleeding subscribers thanks to the increase in streaming. Using current figures, the combined company would have about 20 million subscribers, but that figure could continue to dip before the deal closes in late 2025.

Combined, Dish and DirecTV have lost 63% of their customers since 2016 and traditional pay TV penetration in the U.S. has now dipped below 50%.

EchoStar had attempted to counter at least some of those losses through the Sling brand, which is an OTT streaming TV service, but that segment still remains comparatively small against leaders such as YouTube TV.

EchoStar, meanwhile, will continue to operate with a focus on deploying its nationwide 5G Open RAN wireless network, including Boost Mobile. The company will also remain involved in developing direct to device solutions with satellite technologies. 

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