OAN Staff Abril Elfi
1:11 PM – Monday, September 30, 2024
DirecTV has announced that they will be buying Dish Network for $1, with the U.S. multichannel video programming distributor agreeing to take care of Dish Network’s accumulated debts.
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On Monday, DirecTV officially announced that they will be buying Dish Network, ending decades of on-and-off discussions.
EchoStar-owned Dish had been struggling due to being billions of dollars in debt and potentially facing bankruptcy.
As part of the two-step deal, DirecTV agreed to take on roughly $9.75 billion of Dish’s debt, in exchange for paying only $1 to purchase EchoStar’s TV division, Dish DBS, which includes Sling TV and Dish.
In order to help extend the maturities, Dish and DirecTV are launching an exchange offer at a discounted rate in relation to the debt.
In the announcement, the companies said that the “combination of DirecTV and Dish will benefit U.S. video consumers by creating a more robust competitive force in a video industry dominated by streaming services owned by large tech companies and programmers.”
Both companies have struggled to keep subscribers in the streaming era of Netflix, Hulu and Amazon Prime Video, as the platforms have continued to gain traction, peeling millions of subscribers away from cable TV with lower price tags and on-demand content.
A DirecTV spokesperson who spoke with CNN also noted that in the meantime, private equity firm TPG will acquire AT&T’s remaining 70% stake in DirecTV.
The representative for DirecTV stated that the company will seek to obtain net debt less than $1.56 billion in the upcoming weeks, which is still a condition of the deal for Dish bondholders. Bondholders can choose to wait it out, which increases the likelihood that Dish will file for bankruptcy, or accept a lesser percentage now. On Monday, Dish announced an exchange offer in a press release.
Currently, Dish’s latest $2 billion debt is due on November 23rd. TPG and DirecTV will give Dish a $10 billion loan to secure funding through a shared revenue stream, enabling the company to pay off its maturity on November 24th.
The DirecTV-Dish merger will continue to support the Dish brand for the foreseeable future.
With DirecTV making up more than 11 million of those subscribers, the combined service would have roughly 20 million users. Nevertheless, this number is insignificant in comparison to DirecTV’s 20.3 million peak TV subscribers in 2015, the year AT&T acquired a majority share in the business.
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