Satellite Service DirecTV Buys rival Dish as it Fights the Onslaught of Streaming Services

“DirecTV operates in a highly competitive video distribution industry,” DirecTV CEO Bill Morrow said in a statement. “With greater scale, we expect a combined DirecTV and Dish will be better able to work with programmers to realize our vision for the future of tv, which is to aggregate, curate, and distribute content tailored to customers’ interests, and to be better positioned to realize operating efficiencies while creating value for customers through additional investment.”

The current deal could provide a key lifeline for EchoStar. The Colorado-based telecommunications company has reportedly faced the prospect of bankruptcy as it continues to burn through cash and see losses pile up.

In a recent securities filing, EchoStar disclosed that it had just $521 million in “cash on hand.” And the company forecast negative cash flows for the remainder of the year — while also pointing to major looming debt payments, with more than $1.98 billion of debt set to mature in November.

“With an improved financial profile, we will be better positioned to continue enhancing and deploying our nationwide 5G Open RAN wireless network,” EchoStar President and CEO Hamid Akhavan said. “This will provide U.S. wireless consumers with more choices and help to drive innovation at a faster pace.”

By shedding Dish, EchoStar will be able to focus its efforts elsewhere, like its wireless carrier Boost Mobile.

“We are playing to win in the wireless business. there’s no doubt about it,” Akhavan said during a conference call, adding that the company may need to seek additional funding and financing in the future to achieve its goals.

Shares of EchoStar fell more than 13% in Monday morning trading.

The DirecTV and Dish deal is targeted to close in 2025’s fourth quarter. But it is contingent on several factors, including regulatory approvals and bondholders writing off nearly $1.6 billion in debt related to Dish.

The combined company will be based in El Segundo, California.

Shortly before DirecTV made its announcement, AT&T said it was selling its remaining stake in DirecTV to private equity firm TPG in a deal valued at about $7.6 billion.

The move ends the communication giant’s remaining ties to the entertainment industry.

AT&T said Monday in a filing with the Securities and Exchange Commission that it will receive payments from TPG and DirecTV for its remaining 70% stake in the satellite TV company. This includes $1.7 billion in the second half of the year and $5.4 billion next year. The remaining amount will be paid in 2029.

AT&T purchased DirectTV for $48.5 billion back in 2015. But in 2021, following the loss of millions of customers, AT&T sold a 30% stake of the business to TPG for $16.25 billion.

AT&T’s deal is expected to close in the second half of 2025.