Dish Network, DirecTV Merger Would Make Sense in the “Near Term,” Exec Says
“You’re hesitant to be a political football for somebody to complain about big companies or whatever in an election cycle. But that election cycle is over next week. And then you have a window, where I think all companies are looking at M&A,” Ergen said.
“If the timing was right, it would be in the near term, not the longer term,” he added.
The two companies had previously tried to merge in 2002, but were blocked by federal regulators, who said the combination would reduce the number of video options for consumers. Ergen said he does not foresee that being an issue any more.
“In terms of a legal objection to a merger, that’s been diminished by time and obviously [by] the degradation of the linear TV business and competition from dozens of companies in the OTT business and the proliferation of broadband today,” Ergen said.
The merger could help the two satellite TV operators better compete against cable companies and others in the streaming space.
Dish recorded a decline of about 184,000 customers in its traditional Dish satellite TV business in its third quarter, ending September with 7.61 million. Total Pay TV users also dropped to 10.02 million, down from 10.98 million in the prior year.
Meanwhile, the company has seen growth with its streaming Sling TV business, after several quarters of losses, adding about 214,000 subscribers in the latest quarter to reach 2.41 million. The company attributed part of the growth to the NFL and college football season. This is still below the 2.5 million subs reported in the third quarter of 2021.
Asked whether there will be a more deliberate effort to move the company’s satellite subscribers to streaming, Erik Carlson, DISH president and CEO, said the company has found “spiky” churn and engagement among streaming customers, meaning that the company does do not want to “invest too much” into a seasonal consumer. Meanwhile, the Dish customer tends to be from rural areas and an older demographic, presenting another challenge for migration. Still, it’s something the company is looking at.
“We’re obviously opportunistic with that customer relationship we have with Dish and how else can we monetize or keep that customer within the overall Dish ecosystem. That could be a Sling product, that obviously could be a Boost product. But you’ll see us start to monetize our customer relationships and retain them in a strategic way,” Carlson said.
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