AT & T and Dish Network shares win over DirecTV merger speculation – Deadline

Rumors are increasingly about the potential merger of leading satellite TV distributors DirecTV and Dish, shares of the parent companies of the two services gaining ground Friday.

Dish's shares rose 2.5% to $ 37.10, their highest level in a year and a half. AT & T shares closed the week at $ 32.49, up more than 1% for the day.

According to the proposed scenario on Wall Street, AT & T would divert DirecTV, which it had bought for $ 67.1 billion in 2015, to Dish. Such an agreement would reduce the growing pressure on AT & T with respect to its debt, which has increased significantly after the conclusion of the $ 81 billion contract signed by Time Warner last year. For Dish, the additional scale would improve its prospects, especially after its acquisition of broadcast spectrum failed to produce a long-promised wireless network.

While consolidating the two dominant players in satellite TV would have been unthinkable – and in fact, it was sabotaged by regulators in 2002 when they had different owners – longtime industry watchers say that the landscape is very different now.

"The video market has evolved considerably," commented UBS analyst John Hodulik in a widely distributed research note. In 2002, "Internet TV was in its infancy (YouTube was created in 2005), social media did not exist, and MVPDs were growing strongly." Virtual MVPDs and subscription-based streaming offer ever-increasing competition. The Washington agreement on the XM-Sirius satellite radio merger, and perhaps the future T-Mobile-Sprint combination, augurs well, Hodulik added.

Hodulik plans to remove 2.8 million subscribers, or 14% of the total number of subscribers, in 2019 alone. The purpose of AT & T's purchase of Direct, included in Comcast's recent purchase of Sky, was to acquire the personal information of a large number of subscribers, which could favor the acquisition of customers. and creating synergies elsewhere. But efforts such as DirecTV Now, the "lean" support service offered by the Internet and launched in 2016, have had mixed success.

On Friday, Bloomberg published an article about his professional terminal service – the content of which was later reported by Reuters – according to which Dish is "open" to possibly adding DirecTV. Official talks on the merger, according to the report, have not yet begun.

A representative of Dish refused to publicly acknowledge speculation about the merger. AT & T did not respond to Deadline's request for comment.