DIRECTV and EchoStar entered into an agreement for the former to acquire EchoStar’s video distribution business DISH DBS, which includes DISH TV and Sling TV, through a debt-exchange transaction.
The combination of DIRECTV and DISH is expected to benefit U.S. video consumers by creating a more competitive force in the video industry, extending compelling consumer video options while separately improving EchoStar’s financial profile as it continues to enhance and further deploy its nationwide 5G Open RAN wireless network.
“DIRECTV operates in a highly competitive video distribution industry,” said Bill Morrow, DIRECTV CEO. “With greater scale, we expect a combined DIRECTV and DISH will be better able to work with programmers to realize our vision for the future of TV, which is to aggregate, curate and distribute content tailored to customers’ interests, and to be better positioned to realize operating efficiencies while creating value for customers through additional investment.”
“This agreement is in the best interests of EchoStar’s customers, shareholders, bondholders, employees, and partners,” said Hamid Akhavan, EchoStar’s president and CEO. “With an improved financial profile, we will be better positioned to continue enhancing and deploying our nationwide 5G Open RAN wireless network. This will provide U.S. wireless consumers with more choices and help to drive innovation at a faster pace. We expect DISH and EchoStar bondholders to benefit from two companies with stronger financial profiles and more sustainable capital structures.”
The combined company is expected to:
- Have increased scale to incentivize programmers to allow DIRECTV to deliver smaller packages at lower price points.
- Be better positioned to bring together multiple content sources in one accessible place.
- Have an enhanced ability to make the investments required to improve its streaming services.
- Improve satellite platform viability by realizing efficiencies in some shared fixed infrastructure and operating expenses.
- Provide the broadest array of programming and diverse voices on pay TV.
- Benefit U.S. wireless consumers by allowing EchoStar to focus on enhancing and further deploying its 5G Open RAN cloud-native wireless network.
DIRECTV estimates that the combination of DIRECTV and DISH has the potential to generate cost synergies of at least $1 billion per annum. These synergies are expected to be achieved by the third anniversary of closing, assuming the closing is in late 2025. The transaction will also provide EchoStar with greater financial flexibility by improving its access to capital and reducing overall refinancing needs.
Additionally, TPG announced that it will acquire AT&T’s remaining 70 percent stake in DIRECTV. TPG will invest in DIRECTV through TPG Capital, the firm’s U.S. and European private equity platform. The transaction between TPG and AT&T is expected to close in the second half of 2025, subject to customary closing conditions. Completion of this transaction is not contingent on DIRECTV’s acquisition of DISH.
“DIRECTV was founded 30 years ago to give consumers greater choices than incumbent cable companies for video content, and the Company’s acquisition of DISH TV and Sling TV positions it to again provide more choices and better value in an industry currently dominated by large streaming platforms,” said David Trujillo and John Flynn, Partners at TPG. “Our ability to execute these transactions, alongside our proposed acquisition of AT&T’s 70 percent stake in DIRECTV announced earlier today, exemplifies the unique capabilities of the TPG platform and our experienced sector-focused investment approach as we support DIRECTV’s continued investment in innovating the next generation of video services that benefit consumers.”
