AT&T’s DirecTV and Dish Network are reportedly in fresh talks to merge their pay-TV businesses, re-igniting the possibility of a tie-up after nearly two decades.
AT&T’s (T) – Get AT&T Inc. Report DirecTV and Dish Network (DISH) – Get DISH Network Corporation Class A Report reportedly are in fresh talks to merge their pay-TV businesses, re-igniting the possibility of a tie-up after an attempt to do so was quashed by regulators nearly two decades ago.
Sources told The New York Post there is optimism a tie-up between Dish Network and DirecTV could now get through regulatory scrutiny as concerns about the two communications and entertainment titans’ market power in the satellite-TV space has waned.
Two years ago, the DoJ also quietly warned executives off a prospective deal on concerns about the nascent rollout of 5G, sources told the Post.
But the prospect has been raised once again by private equity firm TPG Capital, which paid AT&T $1.8 billion last February for a 30% stake in a new company set up to house DirecTV, AT&T TV and its U-verse video service, the Post said.
With both companies haemorrhaging customers, a merger is expected to result in around $1 billion cost savings, sources also told the Post.
Both companies have lost customers over the past five years: DirecTV now counts more than 15 million customers compared with 25 million in 2017, while Dish Network’s figure declined from 13 million to 8.4 million, according to reports.
The Post also suggested a merger between the two could also help boost 5G rollouts following opposition from the Federal Aviation Administration regarding the use of C-band spectrum, which forced AT&T and Verizon to delay their launches.
Shares of Dish Network were up more than 6% in the premarket trading.
