**Pay-TV Giant Dish Network on Verge of Sale to DirecTV**
After over 40 years at the helm, Charlie Ergen is close to selling his pay-TV empire, Dish Network, to rival DirecTV. According to sources familiar with the matter, EchoStar, Dish’s parent company, is in advanced talks to sell the satellite TV provider to DirecTV, which is owned by private-equity firm TPG and AT&T.
The deal, valued at over $9 billion, would see DirecTV pay EchoStar for Dish’s satellite TV business, its digital arm Sling, and associated liabilities. The sale is driven by EchoStar’s need to pay off $1.98 billion in debt maturing in November, with the company facing negative cash flows for the remainder of 2024.
The combination of Dish and DirecTV has been rumored for years, but regulatory pressure scuttled a previous attempt in 2002. This time, the deal’s complexity is compounded by the prospect of EchoStar’s bankruptcy and the need for creditor approval.
Dish has struggled to refinance its debt, with bondholder negotiations failing earlier this week. The company remains in talks with other debtholders, but its financial situation is precarious. Analysts predict bankruptcy within the next four to six months if a deal is not reached.
The pay-TV industry has been in decline for years, with consumers switching to streaming services like Netflix and Amazon Prime Video. Dish has lost subscribers, ending its last quarter with 6.1 million satellite customers and 2 million Sling TV users. DirecTV, too, has felt the pain, losing millions of subscribers since AT&T acquired it in 2015.
The proposed deal does not involve Dish’s wireless spectrum, which it has accumulated over the past decade in its bid to transition into a wireless company. Instead, the focus is on the satellite TV business, which has been struggling to compete with streaming services.
DirecTV has been building out its streaming business, recently launching an ad campaign to dispel the notion that it is only available through a satellite dish. The company has added over 20,000 streaming customers this year, but the bulk of its customers still use satellite dishes.
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