DirecTV has now entered a definitive agreement with EchoStar. The agreement will see DirecTV take control of EchoStar’s video distribution business, which includes Dish TV and Sling TV. The deal is expected to result in a combined customer base of almost 20 million.
According to the terms of the deal, DirecTV is acquiring EchoStar’s video distribution business for $1 plus the assumption of Dish’s net debt. The deal is still subject to regulatory approval.
DirecTV says the purchase of Dish and Sling TV will make it easier for the company to offer smaller content packages at lower price points, as it will now be in a better position to negotiate with programmers.
“DirecTV operates in a highly competitive video distribution industry,” said Bill Morrow, Chief Executive Officer, DirecTV. “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.”
Specifically, DirecTV argues the combination of DirecTV and Dish will result in the following:
- Increased scale to incentivize programmers to allow DirecTV to deliver smaller packages at lower price points.
- Better positioned to bring together multiple content sources in one easily accessible place.
- An enhanced ability to make the investments required to improve its streaming services.
- Improve the viability of the satellite platform by realizing efficiencies of some shared fixed infrastructure and operating expenses.
- Continue to provide the broadest array of programming and diverse voices available on pay TV, including local news.
From EchoStar’s perspective, the deal is expected to allow the company to focus more on enhancing and further deploying its 5G wireless network.
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