DirecTV has entered into a definitive agreement to acquire the Dish Network from EchoStar, realizing a long-time goal. The deal sees DirecTV paying Dish Network $1 for video distribution assets including Dish and Sling TV, and taking on $9.75 billion of Dish’s $20 billion in debt. The agreement does not include EchoStar’s wireless spectrum investments. Concurrently, AT&T has agreed to sell its 70 percent DirecTV stake to private equity firm TPG, which holds the other 30 percent. That deal is valued at $7.6 billion and is not contingent on the Dish acquisition, which is expected to close in Q4 2025. Combined, DirecTV and Dish will serve more than 18 million customers.

Variety reports the DirecTV-Dish merger would result in the largest U.S. pay-TV provider. Although the agreement is subject to regulatory approval, Axios predicts that sign-off “should be much easier now, given the shrinking size of the two satellite companies” as a result of cord-cutting.

Most reports indicate that DirecTV and Dish will have a combined 18 to nearly 20 million customers, which Variety notes is a significant drop from their peak 2016 levels.

“On Monday, DirecTV said it has about 10 million pay-TV subscribers, compared with a peak of 25.5 million at the end of 2016. Dish, which once had more than 14 million customers, ended the second quarter of 2024 with 8.07 million pay-TV subscribers,” per Variety. Charter has 13.3 million U.S. video subscribers, while Comcast has 13.2 million.

DirecTV and TPG are putting up $2.5 billion to refinance Dish’s November 2024 debt maturity, DirecTV writes in an announcement. Axios notes that “the deal’s first contingency is DirecTV reducing Dish’s debt by $1.6 billion. To achieve that, DirecTV will offer holders of $9.75 billion in Dish debt an exchange for DirecTV debt,” which is expected to transpire in “two to three weeks.”

“For the deal to be approved, two-thirds of Dish’s creditors must agree to exchange their debt in Dish for debt in the combined company at a discount,” The New York Times writes, adding that “the hope is that these debt holders will be willing to make that trade in return for owning a stake in a company that is bigger and more financially stable.”

“This was the right time to bring the companies together so we could create a company that ultimately had enough ability to negotiate better deals with the programmers and bring smaller packages to the market, which the consumers are asking for,” EchoStar CEO Hamid Akhavan told CNBC, calling it “a scale game.”

EchoStar will retain its “$30 billion in wireless spectrum investments” and continue to operate them “as a stand-alone” business, per NYT.

Following the acquisition, DirecTV will continue to be led by CEO Bill Morrow and CFO Ray Carpenter from headquarters in El Segundo, California.

Related:
DirecTV Is Buying Dish for $1, Joining a Rare Club of Properties Sold for One Buck, Variety, 9/30/24