DirecTV, Dish to Merge to Create Largest US Pay-TV Provider

DirecTV and Dish have agreed to combine in a deal that will create the biggest pay-TV provider in the US.

Under the terms of the transaction, DirecTV will acquire Dish from its owner EchoStar Corp. for a nominal consideration of $1 plus the assumption of about $9.75 billion of Dish debt, according to a statement on Monday that confirmed previous Bloomberg News reporting.

The deal is contingent upon Dish’s bondholders agreeing to take a haircut on the principal amount of the company’s debt of at least $1.568 billion, the statement shows.

DirecTV is owned by AT&T Inc. and joint-venture partner TPG Inc. In connection with Monday’s deal, TPG will acquire the 70% stake in DirecTV that it doesn’t already hold from AT&T in a $7.6 billion cash transaction.

DirecTV and Dish have flirted with merging on and off for two decades. While US regulators sued in 2002 to block a previous attempt to combine, the TV landscape has changed dramatically since then.

Twenty years ago, satellite providers brought TV to rural areas where cable wasn’t available. Today, many of those areas have access to broadband Internet and aren’t as reliant on satellite TV.

At the same time, the rise of popular streaming services from the likes of Netflix Inc. and Amazon.com Inc.’s Prime Video has eaten into the pay-TV industry’s revenues as tens of millions of consumers have canceled their services.

The merger of DirecTV and Dish has been “not a matter of if, only a matter of when,” according to DirecTV Chief Executive Officer Bill Morrow. It’s expected to help the companies survive by giving a combined entity more leverage in negotiations with programmers.

“We want to use our influence to tell the programmers: we are the only pure-play, video-focused entity that’s content agnostic so let us serve a consumer interest that you cannot,” Morrow said in an interview.

Both DirecTV and Dish now offer online TV bundles that replicate the traditional cable or satellite package. DirecTV had an estimated 11.3 million subscribers at the end of 2023. Dish, controlled by billionaire Charlie Ergen, finished the second quarter with 6.1 million satellite customers and 2 million subscribers to its Sling TV online service, officials said on an August conference call.

The combination of DirecTV and Dish has the potential to generate cost synergies of at least $1 billion per annum. The merged company will be called DirecTV but continue to market the Dish TV and Sling TV brands. It will be led by Morrow.

TPG Angelo Gordon and some of its co-investors, as well as DirecTV, have agreed to provide $2.5 billion of financing to EchoStar to fully refinance Dish debt maturing in November 2024, according to Monday’s statement.

PJT Partners Inc. is acting as lead financial adviser to DirecTV and Barclays Plc is lead financial adviser to TPG. JPMorgan Chase & Co. is acting as lead financial adviser to Dish, while Bank of America Corp., Evercore Inc., LionTree Advisors and Morgan Stanley are also providing financial advice to DirecTV and TPG.

The deal is expected to close in the fourth quarter of 2025, subject to regulatory approvals.