Is a DISH Network and DirecTV Merger Back On the Table?

DirecTV and DISH Network are two of the most recognizable satellite TV service provides in the United States. And these two companies could soon join forces and become one – a union that’s (sort of) been on hold for nearly 20 years now. It’s still not fully certain a merger between these two companies will be given the green light by the necessary agencies. However, there’s renewed hope based on what’s being reported by the New York Post. Keep reading to find out what’s going on with a possible DISH-DirecTV pairing.

Is the Second Time Around the Charm?

This isn’t the first time a DISH Network and DirecTV merger has been a possibility. In the fall of 2002, the Justice Department put the kibosh on an attempted merger. The agency claimed such a merger could harm consumers across the country. However, a lot has changed in the almost 20 years since merger discussions were first generating attention.

So, What’s Happening Now?

TPG Capital is one of the key players in the latest merger talks. The Texas-based private equity firm now has operational control of DirecTV. Previously, AT&T was the main company behind DirecTV. But in February of 2021, AT&T sold 30 percent of its stake in the company to TPG. But the telecommunications giant still retains 70 percent ownership of a new standalone company that was created during some other adjustments involving DirecTV that took place in 2021 to further diversify the company. This time, the DISH merger is being pushed by TPG Capital in an effort to optimize its investment. Charlie Ergen, the chairman of DISH Network, appears to be on board, calling the possibility of a merger “inevitable.”

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Are Antitrust Concerns Still a Factor?

The short answer is yes. An industry expert on telecommunications and technology from the independent research company New Street Research cautions that antitrust concerns could put a hitch in merger plans again. Even so, the same industry insider contends other factors at play now give the merger a better chance of becoming a reality this time.

What about Concerns for Consumers?

Back in 2002, it was reasonable to believe a DISH-DirecTV merger could result in a duopoly or monopoly in several areas of the U.S., especially since the two common choices for TV service back then were cable and satellite – at least when over-the-air wasn’t preferred or acceptable due to quality issues. Today, however, consumers have more choices when it comes to multichannel video programming distributor (MVPD) options. Verizon Fios for example, provides a broad range of service options. Consumers also have viewing options from Netflix, Amazon, and Hulu to choose from, along with an assortment of cost-effective bundling possibilities. In other words, the 2022 visual communications market is much more competitive.

Using the Sirius and XM Merger as a Guide

The Department of Justice has taken some notable actions since 2002 that increase the odds of DOJ approval for the DISH-DirecTV union now. In 2008, the DOJ raised concerns about a merger between satellite radio services Sirius and XM. Initially, the agency felt such a merger would create too much control by one player in the satellite radio market. Ultimately, the agency changed its tune upon the realization that both companies were actually part of the “in-car entertainment” market. In other words, there was still plenty of competition from traditional radio and even MP3 players.

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Final Thoughts

A recent push to expand broadband access throughout the United States could also result in more choices for consumers. Even so, there are valid concerns that may give regulators reason for concern. In certain areas of the country, for instance, broadband access is still limited or simply not available. Such situations increase reliance on satellite service providers. Plus, it’s still not common for streaming services to include access to things like live sports and news, although there are some exceptions. Despite some valid concerns, industry insiders are optimistic about the possibility of a DISH-DirecTV merger this time around. Stay tuned.

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