As cord-cutting continues to ravage the linear TV business, EchoStar shed a total of 43,000 pay TV subscribers during its third quarter of 2024 for a total of 8.03 million, including 5.89 million Dish TV subscribers.
The company attributed the decline to higher net Sling TV subscriber additions during the quarter compared to a year ago and a lower Dish TV churn rate, offset by “lower gross new Dish TV subscriber activations.” Sling TV added 145,000 subscribers during the third quarter for a total of 2.14 million.
The pay TV segment posted total revenue of $2.62 billion and operating income of $676 million, compared to revenue of $2.81 billion and operating income of $675.6 million a year ago.
Here are the top-line results out Tuesday:
Net loss: A loss of $141.8 million, compared to a loss of $138.4 million a year ago.
Revenue: $3.89 billion, compared to $3.95 billion expected by analysts surveyed by Zacks Investment Research
Earnings per share: A loss of 52 cents per share, compared to a loss of 28 cents per share expected by analysts surveyed by Zacks Investment Research.
The latest quarterly results come as EchoStar has entered into an agreement to sell Dish to rival DirecTV in a deal valued at $1 and $9.75 billion in debt.
The deal is expected to close in the fourth quarter of 2025, subject to regulatory approval, consent from Dish’s bondholders and other customary closing conditions. As part of the deal, DirecTV, private equity firm TPG Angelo Gordon and certain co-investors provided $2.5 billion in financing to allow Dish to meet its debt maturity in November.
The combined company will be fully controlled by TPG, which will acquire AT&T’s remaining 70% stake in DirecTV in a separate deal expected to close in the first half of 2025 and is not contingent on the closing of the Dish-DirecTV merger.
Additionally, EchoStar revealed on Tuesday that it has successfully completed “various transformative strategic transactions positioning its business for the further enhancement of its nationwide Open RAN 5G Network,” including a roughly $5 billion debt restructuring and the addition of $5.2 billion in fresh capital for its balance sheet.
“Whether the transaction closes or not, we do have a path forward. Now, with the cash available to us from other sources that we have put on balance sheet, we certainly can develop the business regardless of the developments that happen at DBS,” EchoStar CEO Hamid Akhavan told analysts in response to a Bloomberg report that Dish lenders have rejected a bond exchange offer during the company’s third quarter earnings call on Tuesday. “Now, the nuances of the cash between that entity and parent are something that is not going to change the course of our business in terms of value creation, and I won’t comment on various specifics of it today.”
Shares of EchoStar fell over 8% during Tuesday’s trading session following the results.
