• 278 days Will The ECB Continue To Hike Rates?
  • 278 days Forbes: Aramco Remains Largest Company In The Middle East
  • 280 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 680 days Could Crypto Overtake Traditional Investment?
  • 684 days Americans Still Quitting Jobs At Record Pace
  • 686 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 689 days Is The Dollar Too Strong?
  • 690 days Big Tech Disappoints Investors on Earnings Calls
  • 691 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 692 days China Is Quietly Trying To Distance Itself From Russia
  • 693 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 696 days Crypto Investors Won Big In 2021
  • 697 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 698 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 700 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 700 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 703 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 704 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 704 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 706 days Are NFTs About To Take Over Gaming?
5 Recession-Resistant Stocks To Add To Your Portfolio

5 Recession-Resistant Stocks To Add To Your Portfolio

There are growing predictions of…

Defensive Stocks Are Your Best Bet Against Inflation

Defensive Stocks Are Your Best Bet Against Inflation

Stretched asset valuations, ultra-high inflation,…

Charles Benavidez

Charles Benavidez

Staff Writer, Safehaven.com

Charles Benavidez is a writer and editor for Safehaven.com. Charles is located in New York City and has over 5 years of experiencing covering financial…

Contact Author

  1. Home
  2. Investing
  3. Stocks

As Competition Heats Up, Cable TV Mega-Merger Revived

As Competition Heats Up, Cable TV Mega-Merger Revived

The modern-day Montague and Capulet saga involving DirecTV and Dish Network is back, but this time the two satellite-TV giants think they have a chance at a merger despite a history of rejection by federal antitrust officials. 

Earlier this week, the New York Post cited sources claiming that the two companies have launched another round of merger talks, hoping that the deal could be revived because both companies are now struggling and present less of a market threat. 

The two companies had already been barred from merging back in 2002 over concerns of eliminating competition. Then, in 2020, the Department of Justice (DoJ) told two companies it “would likely have to wait until faster 5G wireless service is more widely available in rural markets.”

According to the NYP report, private-equity firm TPG Capital, which bought a 30% share of DirectTV for $1.8 billion last February, is leading the discussions now. The report said that some executives argue that a merger could give a much-needed boost to the US’ rollout of 5G wireless services

So, based on that logic, the sentiment has changed and the tide may have turned. 

5G technology, which promises ultra-fast internet speeds and extra bandwidth and the coverage is rapidly expanding across thousands of U.S. cities. However, 5G availability is still lagging in many rural areas, with many living there not being able to get a streaming television package, among other things.

That’s where DirecTV and Dish come into the picture from a different angle. 

The companies are expected to invest as much as $275 billion into 5G infrastructure before 2025. That coincides with the passage in November in the US House of Representatives of Biden’s $1.2-trillion infrastructure bill, which includes $65 billion for broadband improvements.

T-Mobile is winning the 5G race so far, covering 36.7% of the country mostly thanks to its merger with Sprint. AT&T’s 5G network covers 16% off the United States, followed by Verizon with 10.9% of the 5G coverage.

 AT&T, which currently owns DirecTV, made the acquisition in 2015 for $49 billion, or $67.1 billion with debt included. For the past couple of years, reports have been emerging that AT&T is trying to sell DirecTV, and that it would potentially be valued at just under $20 billion.

DirecTV currently has just over 15 million customers, down from more than 25 million subscribers in 2017, while Dish has 8.4 million subscribers, down from nearly 14 million.

Still, if the two companies are to actually merge, and the companies management claims it will, whether it’s now or in 10 years, it would create the country’s No. 1 satellite TV provider, with a combined subscriber base (including Dish-owned Sling TV) of about 30 million. That is, if we don’t count for the increasing cable cord-cutting going on these days. 

Since the initial merger refusal by the government two decades ago over the elimination of competition, the competition has grown stronger and quite a few new players have emerged. 

More Americans than ever are cutting the cable TV cord in favor of streaming services. According to the most recent data, 78% of consumers in the United States were using one or more streaming services last year. 

It is projected that a total of 55.1 million Americans will be among those who cut cable service by the end of 2022–the trend that has been increasing rapidly since 2018.

Dish’s Sling TV streaming service has 2.59 million subscribers nationwide compared with Netflix's 74 million subscribers in the U.S. and Canada, and HBO’s 45 million subscribers. 

Back to homepage

Leave a comment

Leave a comment