US satellite TV operators DirecTV and Dish Network are in merger talks again, The New York Post reports. The companies attempted a merger nearly two decades ago but the plan was vetoed by competition regulators. Since then their customer bases have shrunk considerably and new competitors have emerged, giving them a less powerful role in the industry.
Two years ago, the Department of Justice also quietly warned executives off a prospective deal, concerned about the nascent roll-out of 5G, the Post's unnamed sources said. Insiders are more optimistic now, saying a deal could pass regulatory muster as concerns about the market power of the companies have waned. With 5G broadband increasingly available in rural areas, the TV providers could face increased competition from streaming services.
According to the report, the talks are being pushed by TPG Capital, which bought 30 percent of DirecTV from AT&T last year. Dish is reportedly less enthusiastic, with chairman Charlie Ergen demanding significant voting shares and a say in key decisions at the combined company despite his minority position, according to the paper's sources.
DirecTV has just over 15 million customers, down from more than 25 million in 2017, according to company filings. Dish has 8.4 million subscribers, down from more than 13 million.
A merger could create upwards of USD 1 billion in cost savings. This money could then be re-invested in Dish's project to build a 5G network.
In 2020, regulators with the DOJ’s antitrust division had told AT&T executives that a marriage between DirecTV and Dish would have to wait until faster 5G service is more widely available in rural markets, two sources close to the situation said. Regulators were concerned that a combined company could jack up the prices of satellite TV.
