DirecTV and Dish Network are reportedly in advanced talks to merge, potentially creating the largest U.S. pay-TV provider, with around 20 million subscribers. If completed, the deal could be announced in the coming days, the Wall Street Journal reported.
According to Bloomberg, DirecTV, owned by AT&T Inc. (NYSE:T) and TPG Inc. (NASDAQ:TPG), will control the newly formed entity, though details are still under negotiation.
The two companies have been steadily losing customers, with viewers opting for cheaper, more flexible streaming services such as Netflix Inc. (NASDAQ:NFLX).
A merger would help DirecTV and EchoStar Corp. (NASDAQ:SATS), Dish's owner, better compete with streaming services while addressing Dish's rising debt levels.
Charlie Ergen, co-founder of Dish, has long sought this combination, though regulatory concerns hindered previous merger attempts. However, shifting from traditional pay TV to streaming may change regulators' stance.
According to the WSJ report, DirecTV currently serves about 11 million customers, while Dish has 8 million, which is down significantly from its peak a decade ago.
The pay-TV industry has faced mounting challenges as viewers transition to streaming, with U.S. subscribers falling from 104 million in 2015 to less than 70 million in 2023. Both companies seek ways to cut costs and adapt to the rapidly evolving entertainment landscape.
A deal would also include Dish's streaming brand, Sling TV, offering a broader range of services under the merged entity.
AT&T previously spun off DirecTV in 2021, moving it into a joint venture with TPG. The telecom giant took a $15.5 billion impairment charge in 2020 to account for subscriber losses, while Dish has shifted focus to building a wireless network, accumulating debt in the process.
Regulatory hurdles remain a concern, particularly in rural areas where satellite TV has been a dominant service.
Price Action: At last check Friday, SATS stock was up 4.62% to $26.95 during the premarket session. T stock was up 0.18% to $21.69.
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Image via DirecTV