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What to make of reports of a Dish DirecTV merger

March 28th, 2014

dish network directv satellite tv mergerBloomberg news via reported this week that DISH Network’s infamously sharp CEO and Chairman Charlier Ergen has reached out to and contacted DirecTV’s CEO, Michael White, about a potential merger between the two satellite TV giants, the only real competitors in the that industry.

The potential merger isn’t expected to make much noise right now, though it certainly would if it started to materialize, but it is mostly seen as a shot across the bow of the Comcast/Time Warner Cable $45 Billion dollar merger that is currently on the desk of Congress and the FCC right now. The two companies motivations for releasing such press or reports is up in the air, but one can certainly make a good argument that it clearly was a message of some kind in relation to the Comcast deal.

But why? The Comcast merger can’t necessarily be looked at in a vacuum. If implemented ten years ago, people would simply look at it as a classic corporate move for shareholders, but not in the days of Netflix and net neutrality wars. Instead, the Comcast merger is taking place up against the political and economic backdrop of the ever changing over-the-top subscription of online media content and providers like Hulu and Netflix. With that in mind, the DISH move, while not totally understood, can easily be seen as some sort of message there.

Both Dish and DirecTV are probably looking to monetize more packages, and give customers more options than companies like Comcast and the like. The discussion of a merger might if anything be a mis-reported story that was actually the two sides discussing those options and ways to bring customers more a la carte shows that subscribers have been asking for years ago.

Regardless of where your moral or financial allegiances may lie. Customers (or investors) have met the talks with a decent ear. It was reported that Dish Network stock jumped +5.5% once news was released on the stock markets in New York that such talks had taken place. And DirecTV’s shares jumped +2.6% as well, not to be totally outdone.

As fierce competitors, it is interesting to see the two companies discuss a merger when both are doing so well. (Comcast wants to merge precisely because TWC and Comcast do not compete, and it will only hurt consumers.) One would expect the two companies to remain in that competitive window, but perhaps the Comcast move has changed that, and American consumers will have to wait and see what transpires.

is an Entertainment and News Blogger for TV and Dish Network.

Categories: DISH & TV news


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