A blockbuster deal that would have combined DirecTV and Dish Network is off.
On Nov. 21, DirecTV announced plans to terminate its equity-purchase agreement with EchoStar Corp. on the following day. The deal would have allowed DirectTV to purchase EchoStar’s video-distribution business, DISH DBS, which includes satellite television provider Dish Network and the video streaming service Sling TV.
In a release, DirecTV said the deal fell through because the owners of DISH DBS’s debt did not agree on EchoStar’s exchange debt offer terms. That aspect of the transaction had to be finalized for DirecTV to close its acquisition of Dish Network.
Along with Dish Network and Sling TV, EchoStar owns Boost Mobile and other broadcasting and broadband assets, including Hughes Network Systems.
When the transaction was initially announced on Sept. 30, EchoStar and DirecTV said in a joint statement the move would “provide consumers with compelling video options while separately improving EchoStar’s financial profile as it continues to enhance and further deploy its nationwide 5G Open RAN wireless network.” The deal was originally expected to close by the end of 2025.
In a commentary released by the company as part of a Sept. 30 investor call, EchoStar said the transaction was dependent upon DirecTV paying $1 for Dish’s Pay-TV businesses and then taking on all of DISH DBS’s debts.
Those debts totaled about $9.75 billion, according to an investor presentation given on Sept. 30.
In a release, DirecTV CEO Bill Morrow said the company will continue with its mission by “pursuing innovative products and providing customers with additional choice, flexibility, and control.”
“We are well positioned for the future with a strong balance sheet and support from our long-term partner TPG,” Morrow said.
DirecTV, currently owned by telecom giant AT&T Inc. and financial services company TPG Inc., is transitioning to full ownership by the Fort Worth, Texas-based global alternative asset management firm. Right now, AT&T owns 70 percent and TPG holds 30 percent.
On Sept. 30, TPG announced it was buying AT&T’s stake in DirecTV for $2.5 billion. A release from TPG said it will pay the Dallas-based company $2 billion in 2025 and $500 million in 2029. AT&T can expect to receive about $7.6 billion in cash payments from DirecTV through 2029.
In the September announcement, TPG said DirecTV has “millions of subscribers and delivers multi-billion dollars of revenue annually.” The transaction is expected to close by the end of 2025 and is subject to regulatory approvals.
On Nov. 21, DirecTV said the failure of the Dish acquisition will not affect its transition plans with TPG.
As of Friday afternoon, EchoStar had not commented on the canceled deal. Representatives of EchoStar did not immediately respond to a request for comment from The Epoch Times.
In its third-quarter earnings report, published on Nov. 12, EchoStar said it was losing subscribers to its pay-TV businesses. Nevertheless, at the end of the quarter, it had 5.89 million DISH TV subscribers.
The company also reported a net loss of $143.8 million during the quarter, bringing its loss for the year so far to $459.6 million. Through the first nine months of 2023, EchoStar had a net income of $386.8 million.
