DirecTV and Dish Merger Would Likely Be Approved


By

on

in

,

remote pointing at tv

Watching tv and using remote controlWe’ve been hearing about a potential merger of DirecTV and Dish for years. With AT&T seemingly losing interest in the satellite service and losing subscribers quarter after quarter, the idea of the companies merging or AT&T selling the service off completely doesn’t sound too far-fetched.

Now, according to a report from Fierce Video, Craig Moffett from MoffettNathanson Analysts says that if DirecTV and Dish came to an agreement about a merger, it’s likely that regulators would sign off on the deal.

“Satellite TV was growing by leaps and bounds at the time. Now it is in free fall. That alone may be enough to settle the debate; sure, two would be better than one, but both are credible bankruptcy risks on their own. Heck, they’d be a credible bankruptcy risk even together. Simply preserving an option for rural America at all would be the argument. And it would be a reasonably persuasive one,” wrote Moffet.

There are two potential issues that Moffett notes when discussing the potential merger. First, if the two services combined, they would have 30 million satellite subscribers, giving them control of 32% of the linear pay TV industry. While numbers like these contributed to the 2002 denial of a merger, Moffett does note that internet provided TV services could offer enough competition to make that reasoning a non-issue.

The second issue is that potential buyers may not trust that equity returns for the combined service would be worth it. “Ultimately, all this is a question of valuation,” wrote Moffett. “We’ve seen and heard analyses that apply valuations as high as five or six times EBITDA. Those kinds of valuations are wholly inappropriate for businesses declining by double digits.”

Please follow us on Facebook and Twitter for more news, tips, and reviews. Need cord cutting tech support? Join our Cord Cutting Tech Support Facebook Group for help.

Did you know we have a YouTube Channel? Every week we have a live Cord Cutting Q&A, and weekly Cord Cutting recap shows exclusively on our YouTube Channel!

Disclaimer: To address the growing use of ad blockers we now use affiliate links to sites like http://Amazon.com, streaming services, and others. Affiliate links help sites like Cord Cutters News, LLC stay open. Affiliate links cost you nothing but help me support my family. We do not allow paid reviews on this site. As an Amazon Associate I earn from qualifying purchases.

Subscribe to Our Newsletter

* indicates required

Please select all the ways you would like to hear from :

You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit our website.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp’s privacy practices here.