EchoStar sells Dish to DirecTV, merging major pay TV providers | Wilnesh News

echo star EchoStar shares plunged 10% after a deal announced on Monday to sell its Dish TV provider and digital business Sling to rival DirecTV brought together the two largest pay-TV providers.

DirecTV agreed to pay Dish a nominal fee of $1. The deal would subject DirecTV to about $9.75 billion in debt and is contingent on the approval of some of Dish’s bondholders. According to the press release.

The transaction is expected to close in the fourth quarter of 2025.

“This is the right time to bring these companies together so that we can create a company that is ultimately capable of negotiating better deals with programmers and bringing smaller packages to market, more bite-sized packaging, which is what consumers are demanding, EchoStar CEO Hamid Akhavan said Monday on CNBC’s “Squawk on the Street.”

“I think it’s a scale game that puts us on a level playing field with our competitors in the market,” he said.

Akhavan said the content distribution industry as a whole has been in steep decline, with distribution companies like Dish and DirecTV falling behind other platforms with newer technology and wider reach.

He also said that EchoStar cannot fully support its video distribution and core wireless network businesses, and the merger will allow the company to put all its resources into core services.

Also on Monday, AT&T Announced that it will sell all 70% of its shares in DirecTV to private equity firms TPG $7.9 billion. The company sold 30% of its shares to TPG in 2021, which valued it at $16.2 billion at the time. AT&T originally acquired DirecTV in 2014 for $48.5 billion.

Rumors about a possible merger between Dish and DirecTV have persisted for decades. company very close EchoStar acquired DirecTV in a 2002 deal General Motors‘Hughes Electronics, before the FCC shut it down. At the time, EchoStar defeated Rupert Murdoch’s News Corp. in a bidding war for DirecTV.

Since then, the satellite TV industry has suffered several major blows as consumers have turned to streaming services. According to public documents, as of June 30, EchoStar was about to repay about $2 billion in debt, with only $521 million in cash and cash equivalents, and was increasingly facing the prospect of bankruptcy. The company reportedly recently tried to refinance some of its debt but was unable to reach an agreement with bondholders Documents submitted on September 23.

Akhavan said EchoStar has secured enough funding for a bright future, but won’t be making too many big moves anytime soon as it’s still digesting recent changes. He said the company will prioritize customer acquisition over expanding services.

“Whether it’s price, coverage or quality, our products are as competitive as any other company,” he said.

—CNBC’s Lillian Rizzo and Alex Sherman and Reuters contributed to this report.