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DirecTV said it made a deal with EchoStar to buy EchoStar’s video businesses, including satellite-TV provider Dish TV and virtual MVPD Sling TV, for $1 plus the assumption of debt.
While both DirecTV and Dish have been losing customers to cord-cutting, combined they would have about 20 million subscribers, tops in the shrinking pay TV business.
AT&T, which spun off DirecTV but retained 70% ownership in the satellite company, said it sold its stake to private-equity company TPG.
“DirecTV operates in a highly competitive video distribution industry,” DirecTV CEO Bill Morrow said. “With greater scale, we expect a combined DirecTV and Dish will be better able to work with programmers to realize our vision for the future of TV, which is to aggregate, curate and distribute content tailored to customers’ interests, and to be better positioned to realize operating efficiencies while creating value for customers through additional investment.”
Upon closing, DirecTV will continue to be led by Morrow and Ray Carpenter, DirecTV’s chief financial officer. The combined company will be headquartered in El Segundo, California.
The two companies have discussed various combinations over the years.
DirecTV said it estimates that the combination of DirecTV and Dish has the potential to generate cost synergies of at least $1 billion per year. These synergies are expected to be achieved by the third anniversary of closing, assuming the closing is in late 2025.
In addition, TPG Angelo Gordon and certain of its co-investors, and DirecTV, provided $2.5 billion of financing to fully refinance Dish DBS’s November 2024 debt maturity fully.
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