In what could become a blockbuster deal, the two major U.S. satellite providers, Dish and DirecTV are reportedly talking about a potential merger. Bloomberg reports that Dish CEO Charlie Ergen contacted DirecTV’s top man, Mike White to talk about combining the two companies.
The news comes on the heels of a Comcast-Time Warner combination which is currently in the works. DirecTV has 20 million subscribers and Dish has 14 million.
It would make for a very large satellite provider and one that would lead for some concern on sports networks which like to play Dish off DirecTV and vice versa.
Currently, Dish carries Pac-12 Networks while DirecTV does not. Dish recently agreed to be pick up ESPN’s Longhorn and SEC Networks, both of which are not on DirecTV. On the other hand, DirecTV carries a bevy of regional sports networks which Dish has steadfastly refused.
This isn’t the first time Dish and DirecTV have flirted with a merger. A move in 2002 was blocked by the Feds and there’s skepticism that a move 12 years later would work. However, Ergen has made it known that he feels a combined Dish/DirecTV brings significant value and some analysts agree. But those same analysts feel regulators would still block a merger.
Dish is most likely looking for a suitor to take its assets. Analysts feel that the company has probably approached others besides DirecTV in an attempt to fight off cable consolidation.
DirecTV’s White has been slow to embrace a deal, but he has not totally ruled it out. Should the two companies merge, it would make for a rather large company, but also leave the satellite industry without any competition.
This is still in the early stages and will likely take several months to reach the merger stage. It’s best to remain skeptical about the potential marriage, but also a bit fearful that this could lead to higher prices for consumers if it does come to fruition.
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