NEW YORK: AT&T Inc and joint-venture partner TPG Inc are in talks to combine their DirecTV service with Dish, according to people familiar with the matter, a deal that could create the largest pay-TV provider in the United States.
The discussions between DirecTV and Dish parent EchoStar Corp are in the early stages, said the people, who asked not to be identified because the information is private.
An agreement hasn’t been reached and talks could still end without one, they said.
“Rumours about a potential transaction involving DirecTV and Dish are nothing new, but we don’t comment on rumors and speculation,” a spokesperson for DirecTV said in an emailed statement.
A spokesperson for AT&T also said the company didn’t comment on rumours or speculation. Representatives for TPG and EchoStar declined to comment.
A merger of the two largest satellite-TV providers would create a single company with about 20 million subscribers at a challenging time for the pay-TV industry.
It would also cap years of speculation about consolidation in the satellite-TV business. EchoStar just closed its acquisition of Dish in December.
While past discussions of a DirecTV-Dish combination have run up against antitrust concerns, the shift from pay TV to streaming has changed the competitive landscape.
Shares of EchoStar gained as much as 1.9% after the close of regular trading last Friday, after rising 8.9% earlier in the day to give the company a market value of US$6.59bil.
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 two million subscribers to its Sling TV online service, officials said on an August conference call.
In August 2021, to get the TV business off its books, AT&T moved DirecTV into a joint venture with private equity investor TPG in a deal that valued the company at about US$16bil.
AT&T held 70% while TPG received 30%. Due to subscriber losses, AT&T took a US$15.5bil impairment charge in 2020 to account for the lower value of the operation.
Since Sept 1, DirecTV had been battling Walt Disney Co, the owner of ESPN and ABC, among other networks, in a carriage dispute that they settled last Saturday.
While the companies were trying to resolve that dispute, DirecTV customers weren’t able to watch last week’s Monday Night Football match between the San Francisco 49ers and the New York Jets or the US presidential debate. — Bloomberg
