DirecTV, Dish Strike Pointless Merger In Last Gasp Effort To Stay Relevant

Culminating a deal that’s been rumored about for the better part of the last twenty years, Dish Network and DirecTV have struck a new merger in a bid to try and remain relevant. It’s not going to help.

The deal involves DirecTV acquiring Dish for one dollar, in addition to $9.75 billion in Dish’s debt. The deal will combine Dish’s 8.1 million (and shrinking) subscriber base with DirecTV’s 11 million (and shrinking) subscriber base in the hopes of creating something semi-interesting.

As per tradition, the company’s press release proclaims that the deal will result in all manner of amazing new synergies, including lower prices for consumers:

“DIRECTV was founded 30 years ago to give consumers greater choices than incumbent cable companies for video content, and the Company’s acquisition of DISH TV and Sling TV positions it to again provide more choices and better value in an industry currently dominated by large streaming platforms.”

That’s generally not what happens. Instead, the merging companies are saddled with so much new debt and distraction from the consolidation that they’re forced to either raise prices on consumers or take an axe to things like foundational customer service, driving more customers to the exits. There’s also the issue of untold layoffs as the two companies eliminate redundant positions.

Both Dish Network and DirecTV have been bleeding satellite TV subscribers for years to streaming. And while both companies have embraced streaming themselves (like Dish’s Sling TV), that hasn’t gone well either. Neither has Dish’s effort to pivot into wireless with a shitty new 5G network cobbled together by the Trump administration to try and downplay the competitive harms of the T-Mobile and Sprint merger.

You might recall that AT&T acquired DirecTV and Time Warner in the belief they could create a video advertising juggernaut. Instead the $200 billion in mergers resulted in an absolute bloodbath of debt, layoffs, higher consumer prices and a worse overall product. AT&T jettisoned its remaining 70% of DirecTV this week at a major loss.

These are dying companies that lack the money, support, or strategic competence to accomplish the innovative pivots they’d like to perform, and these deals will only be a delayed distraction from the inevitable. U.S. business press coverage of the deal, as per tradition, won’t make any of that clear to the workers or consumers who’ll soon be first in line to foot the bill.