Charlie Ergen, Chairman and Co-Founder, Dish Network Corporation
Jonathan Alcorn | Bloomberg | Getty Images
Charlie Ergen is close to selling the pay-TV business he founded more than 40 years ago.
echo star Negotiations are underway to sell satellite television provider Dish Network to DirecTV, a privately held pay-TV operator owned by private equity firm TPG. AT&T, According to a person familiar with the matter. The people, who requested anonymity because the talks are private, said both sides hope to complete a deal by Monday, but a deal is not guaranteed and talks could still break down. Ta.
A merger between Dish and DirecTV has been rumored for years and nearly came to fruition in 2002 before regulatory pressure forced the company to collapse. The deal was driven by Echostar’s desire to pay down $1.98 billion in debt that matures in November, two people familiar with the process said. Echostar had just $521 million in cash and cash equivalents and marketable investment securities as of June 30 and expects to have negative cash flow for the remainder of 2024, according to public filings. I am doing it.
The prospect of Echostar’s future bankruptcy and approval of the transaction from creditors complicate completion of the transaction. Dish tried to refinance some of its debt from bondholders earlier this week, but negotiations were unsuccessful, according to a Sept. 23 filing.
The company said in public filings that it continues to hold discussions with other debtors.
The deal between DirecTV and Dish could be an all-cash deal, with DirecTV paying Echostar for its satellite TV business, a sling for its digital business and related debt, the people said.. The deal could be worth more than $9 billion in total, one of the people said.
A DirecTV spokesperson declined to comment. A Dish spokesperson could not be reached for comment.
“The bottom line is we currently believe bankruptcy is most likely within the next four to six months.” [for EchoStar]” Craig Moffett of Moffett Nathanson said in a note to clients in August. “They will need to raise new capital.”
EchoStar has a total enterprise value of approximately $31 billion and a market capitalization of approximately $7.6 billion. The proposed deal does not include radio spectrum, which Dish Network has been accumulating over the past decade in an effort to become a wireless company, the people said.
Satellite TV used to be some of the largest distributors of TV bundles, Often declining at a faster rate than its cable TV competitors — As consumers switch to subscription streaming services like Netflix, disney plus and Amazon prime video. Dish ended the last quarter with 6.1 million satellite subscribers and 2 million customers for Sling TV, the linear network’s over-the-Internet package.
DirecTV has also felt the pain, losing millions of subscribers since AT&T acquired the company in debt for $67 billion in 2015. AT&T spun off the company in 2021 and sold part of the company to TPG. At the time, DirecTV had approximately 15.4 million subscribers. CNBC previously reported that number is now around 11 million.
The company has recently been focused on building its streaming business, with its latest ad campaign centering on dispelling the notion that DirecTV is only available through a satellite dish. Moffett-Nathanson estimates that DirecTV added more than 20,000 streaming customers earlier this year. The majority of customers still use satellite dishes.
Most recently, DirecTV got into a distribution battle with Disney that resulted in networks including ESPN being shut off for nearly two weeks for the satellite TV company’s customers. The two companies have reached a deal that will allow DirecTV to offer more exclusive, genre-specific bundles.
—CNBC’s Lillian Rizzo contributed to this report.
