DIRECTV abandons plans to acquire DISH & Sling TV

(WJET/WFXP) – After months of negotiations, DIRECTV announced it has terminated its acquisition of DISH parent company DBS and its streaming service Sling TV as part of a multibillion-dollar debt-saving deal.

The deal was originally agreed to on Sept. 30 under which EchoStar, the parent company of DISH DBS, would sell DISH and Sling TV to DIRECTV for $1, as well as transfer nearly $10 billion in debt. The merger was expected to bring together two key players in satellite television, a sector that has been struggling with the rise of streaming platforms.

DIRECTV said in a press release that DISH DBS bondholders did not agree to EchoStar’s proposed terms, which included a significant restructuring of existing debt and adjustments to interest rates to align with the proposed transaction. This was a condition that had to be met in order for DIRECTV to acquire DISH under the purchase agreement.

“While we believed that the combination of DIRECTV and DISH would benefit all parties involved, we terminated the transaction because the proposed Exchange Terms were necessary to protect DIRECTV’s balance sheet and our operating flexibility,” said Bill Morrow, CEO of DIRECTV.

The satellite TV industry is experiencing subscriber loss as consumers shift to on-demand streaming services. The merger was seen as a way to better compete and streamline its services in hopes of better competing with services like Disney+, Hulu and Netflix.

Despite the setback, EchoStar is raising $5 billion in new capital from investors, which it plans to use to expand its offerings, including the development of Direct to Cell satellite services. This technology allows satellites to connect directly to standard cellular devices, providing coverage in areas where there are no traditional cell towers.

DIRECTV is also set to close a $7.6 billion deal in which investment firm TPG Angelo Gordon will acquire the remaining 70% stake in the company from AT&T.

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