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Update 3:55 PM ET: Adds AT&T’s response
Telecom operator AT&T (NYSE:T) and joint-venture partner TPG Capital (NASDAQ:TPG) are in discussions about merging their DirecTV service with EchoStar’s (NASDAQ:SATS) Dish, as per a recent Bloomberg report citing insiders.
The reconvening of merger talks between DirecTV and EchoStar signals a renewed attempt to create the most formidable pay-TV provider in the U.S., inciting nostalgic memories of earlier failed merger attempts, notably in 2022 thwarted by the U.S. Justice Department.
In its embryonic stage, deal discussions between DirecTV and EchoStar remain tenuous. An agreement has not solidified, and these murmurs could easily dissipate.
“We do not indulge in the game of rumors or speculations,” retorted a spokesperson for AT&T (T).
Dish has yet to acknowledge a request from Seeking Alpha for commentary on the matter.
The potential merger is poised to invite antitrust scrutiny once more, although the landscape has evolved with the advent of industry heavyweights such as Amazon’s (AMZN) Prime Video, Google’s (GOOG) (GOOGL) YouTube TV, Netflix (NFLX), Comcast (CMCSA), and Charter (CHTR).
AT&T (T) previously relinquished control of DirecTV to TPG in 2021 in a transaction valuing the entity at $16 billion. The telecom behemoth ceded operational authority of the satellite provider, U-verse, and AT&T television units while retaining a 70% interest in the spun-off DirecTV entity.
Reportedly, AT&T (T) had been exploring different avenues for the joint venture, including dividend recapitalization, attracting a fresh investor, or divesting from the partnership.
Recently, Disney (DIS) terminated access to its network for over 11 million DirecTV subscribers due to the failure to renew their distribution pact before its expiration last Sunday.
In August, a legal ruling thwarted a major collaborative sports streaming service organized by Disney (DIS), Fox (FOX) (FOXA), and Warner Bros. Discovery (WBD).