EchoStar CEO Hamid Akhavan speaks on CNBC’s “Squawk on the Street” on September 30, 2024.
CNBC
echo star is selling its Dish TV provider and sling of digital operations to rival DirecTV in a deal announced Monday that brings together two of the largest pay-TV providers. Echostar stock fell more than 11% on Monday.
DirecTV agreed to pay Dish a nominal fee of $1. The deal will see DirecTV assume approximately $9.75 billion in debt, subject to the consent of certain Dish bondholders, according to a news release.
The transaction is expected to close in the fourth quarter of 2025. Combined, DirecTV and Dish will serve nearly 20 million customers, according to Reuters.
“This is the perfect time to bring both companies together, and ultimately have enough capacity to negotiate better deals with programmers and bring to market the smaller packages, more bite-sized packages that consumers are demanding. “We were able to build a company with a
“I think this was a scale game that put us on a level playing field with our competitors in the market,” he said.
Akhaban said the content distribution industry as a whole is in significant decline, with distribution companies like Dish and DirecTV falling behind other platforms with newer technology and broader reach.
He also said that while EchoStar is unable to fully support both its video distribution business and its core wireless Internet business, the merger will allow the company to devote all its resources to its core services.
Also on Monday, AT&T Announced that it will sell all 70% of DirecTV’s shares to a private equity firm. TPG 7.9 billion dollars. The company sold a 30% stake to TPG in 2021, valued at $16.2 billion at the time. AT&T originally acquired DirecTV in 2014 for $48.5 billion.
A potential merger between Dish and DirecTV has been rumored for decades. The two companies were close to an agreement in 2002 that would see EchoStar acquire DirecTV. general motorsHughes Electronics before the Federal Communications Commission shut it down. At the time, EchoStar beat Rupert Murdoch’s News Corporation in a bidding war for DirecTV.
Since then, the satellite TV industry has taken some major hits as consumers migrate to streaming services. With about $2 billion in debt payments looming and just $521 million in cash and cash equivalents as of June 30, Echostar increasingly faces the possibility of bankruptcy, according to public filings. are. The company recently attempted to refinance some of its debt, but was unable to reach an agreement with bondholders, according to a Sept. 23 filing.
Akhaban said Echostar has secured sufficient capital for a bright future, but is unlikely to make many big moves soon as it is still digesting recent changes. He said the company will prioritize customer acquisition over service expansion.
“We are second to none in terms of the service we provide, including price, coverage and quality,” he said.
— CNBC’s Lillian Rizzo, Alex Sherman and Reuters contributed to this report.
