DirecTV and Dish Network Are Not Merging, Deal Is Canceled Effective Immediately

DirecTV and Dish Network are not merging after all. Satellite TV provider DirecTV has backed out of a deal that would have created the largest pay-TV company in the U.S.

Years of discussion led to serious talk about DirecTV acquiring longtime rival satellite TV provider Dish Network, which is owned by EchoStar. An agreement was reached in September, and it looked like both parties were moving forward. Yet, effective immediately, the deal is no longer on the table.

“While we believed a combination of DirecTV and Dish would have benefitted all stakeholders, we have terminated the transaction because the proposed exchange terms were necessary to protect DirecTV’s balance sheet and our operational flexibility,” said DirecTV’s CEO Bill Morrow, per Axios.

In the initial contract, DirecTV offered $1 for Dish, which also included streaming service Sling TV. The satellite TV provider was also planning to take $9.75 billion in debt off EchoStar’s books. Together, the new company would have had almost 20 million subscribers.

The DirecTV-Dish Network Merger That Didn’t Happen

The failed merger is a real blow for Dish Network. The satellite company has been losing subscribers for years as consumers switch to streaming. The company even tried to get a piece of the wireless business with the acquisition of Boost Mobile. If DirecTV had taken the reins, the merged company would likely be better positioned to compete against the streaming giants and adjust to a changing TV landscape.

“Times have changed,” said EchoStar CEO Hamid Akhavan in a September interview with CNBC. “The content-distribution industry has been on the decline, losing customers at a rapid pace.”

Ideally, a DirecTV-Dish Network merger would create greater negotiating power. Large programming creators, such as Disney, often flex some muscle and force TV providers to include channels in plan bundles that subscribers don’t really want. A bigger and more stable merged entity could demand better programming deals, allowing some flexibility and customization of package offers.

The downside is that a new, dominant company could raise prices. Decreased competition in the satellite service arena means greater control for a merged provider. DirecTV Subscribers were already hit with price hikes in October when some monthly plans increased by $10.