News & Analysis
Will Dish Network Merge With DIRECTV?
Washington, D.C. (May 24, 2011)
-- New Dish Network CEO Joe Clayton teased Wall Street yesterday
by saying he believes a merger with DIRECTV would have a better
chance of getting federal approval today than it did nine years
ago when it was rejected.
Clayton, who replaced longtime Dish CEO Charlie Ergen this month
(Ergen remains as chairman of the board), told Bloomberg
Television that he also wouldn't rule out a merger between the
nation's two largest satcasters.
discount any possibility,” Clayton said.
“It’s probably easier from a regulatory
environment today than it was 5 to 10 years
ago, when it was originally proposed. We’re
looking at anything that will help enhance
Clayton did qualify his remark by adding
that he was unaware of any merger talks
going on at this time.
The two companies tried merging a decade ago
but the Federal Communications Commission
rejected the deal on grounds that it would
be anti-competitive. But Clayton noted that
more TV competitors such as Verizon and AT&T
have entered the business -- and there has
been an explosion of online video services
from companies such as Netflix and Vudu.
Unlike 2002, when consumers in areas where
cable did not pass had only DIRECTV or Dish
Network as options, today you can watch
video from a variety of sources regardless
of your location.
The major benefit of a merger to DIRECTV and
Dish would be a streamlining of operations
and expenses, which would reduce overall
expenditures. Also, the two companies
combined would total roughly 35 million
subscribers which would make the new entity
a more powerful force in the industry.
Clayton's apparent slip of the tongue was
not an accident. I believe both companies
are interested in pursuing a merger and
would love to set the stage for a favorable
reception in Washington.
believe that DIRECTV was pursuing a deal
with AT&T until the telco decided to buy
T-Mobile. Now with that possibility out of
the way, it will be more inclined to listen
to a Dish deal.
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Phillip Swann is president and publisher of TVPredictions.com.
He has been quoted in dozens of publications and broadcast
outlets, including CNN, Fox News, Inside Edition, The New York
Times, The Washington Post, The Chicago Tribune, The Financial
Times, The Associated Press and The Hollywood Reporter. He can
be reached at firstname.lastname@example.org
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