Shares of Dish Network parent EchoStar jumped over 11% during Friday’s trading session following reports that the satellite TV giant has entered into advanced talks with DirecTV that could see the two companies combine to form the largest pay TV giant with around 20 million subscribers.
Bloomberg reports that DirecTV would control the combined entity and that EchoStar and TPG are expected to remain investors. The Wall Street Journal reports that a deal, which would also include Sling TV, could be finalized as soon as Monday, though it warned that talks could still fall apart.
DirecTV had an estimated 11.3 million subscribers as of the end of 2023, according to Leichtman Research Group, while EchoStar reported a total of 8.07 million pay-TV subscribers as of the second quarter of 2024 — including 6.07 million Dish TV subscribers and 2 million Sling TV subscribers.
In 2021, AT&T divested a 30% stake in DirecTV to TPG for $16.25 billion — roughly 30% of what the telecommunications giant paid for the satellite TV company, which it bought for $49 billion in 2015. Meanwhile, EchoStar closed its acquisition of Dish late last year.
Representatives for DirecTV and AT&T declined to comment on “rumors or speculation.” Dish and TPG did not immediately return TheWrap’s request for comment.
The talks come at a time when the pay-TV industry is bleeding video customers who are cutting the cord for streaming. Bloomberg Intelligence estimates that the pay-TV industry has lost nearly 30 million users between 2015 and 2023 — and could lose another 6 million by the end of 2024.
They also come as EchoStar has roughly $2 billion of debt maturing in November. At the end of the second quarter of 2024, EchoStar’s cash, cash equivalents and marketable investment securities totaled $521 million.
“Currently, we do not have the necessary cash on hand and projected future cash flows to fund fourth quarter operations or the November 2024 debt maturity,” chief financial officer Paul Orban told analysts during the company’s second quarter earnings call in August. “We are currently working to address this with our refinancing activities and are in discussions with funding sources at all levels in our capital structure.”
DirecTV and Dish have held on-and-off talks about a possible combination in the years since the Justice Department sued to block the two parties’ first attempt at a merger back in 2002. If an agreement is reached between the two companies, it remains to be seen if regulators would greenlight the deal.
AT&T stock was up about 1.2% during Friday’s trading session.
