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Will Dish Network Merge With DIRECTV?
By Swanni

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.

I don’t 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 shareholder value."

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.

Swanni Sez:

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.

I also 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 swann@tvpredictions.com or at 703-505-3064.

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