Round Two of the Fight for a DirecTV-Dish Network Merger
They say good things come in pairs, but in the eyes of the FCC, this isn’t always so. About 20 years ago, Dish Network and DirecTV attempted to merge into a single company. This triggered a Department of Justice investigation and whispers of anti-trust violations. In the end, the FCC ruled that the merger would indeed cross the boundaries of anti-trust laws. For 20 years, both companies have gone on to survive in the online streaming era.
Fast-forward to the beginning of this year, and there are already whispers that DirecTV and Dish Network are about to go for Round 2 of their quest to merge. The latest first rumbling of this situation came from a New York Post article. TPG Capital is a minority stakeholder and has some control over DirecTV. It’s reported that this is their idea to move forward on merger talks.
TPG Capital leaders aren’t the only people who believe that the merger will happen. Dish Network chairman Charlie Ergen is fond of calling the merger “inevitable.” What’s more, many insiders believe that round two might actually be a knockout success for both companies. A lot of things have changed since their first attempt.
Antitrust laws are pro-competition and anti-monopoly.. 20 years ago, Dish Network and DirecTV were pretty much the only options that television consumers had to choose from if they wanted to watch outside of their local cable TV companies. The FCC ruled that the similarity of Dish Network and DirecTV would form a virtual monopoly over the industry.
Oh, how things have changed. Today’s television consumers have a near-infinite array of platforms to choose from. There’s Apple TV, Dish TV, Amazon Prime, Hulu, Netflix, HBO Max, and so many more. For those who have wireless internet, they watch “television” on their tablets, laptop, and even smartphones. Blair Levin, a policy advisor to New Street Research, believes that this time, the Dish and DirecTV merger might be significantly more likely to go through.
Levin says, “If the antitrust authorities agree, the government would likely deem that market significantly more competitive, with the merger unlikely to cause an anti-competitive effect.” New Street Research is a respected independent research firm that focuses on technology just like this, so it’s possible that their prediction will prove correct.
That’s not to say that there won’t be “uncertainty about its fate,” Levin says of the merger. The DOJ is certain to zone in on the sameness of the companies just like they did almost 20 years ago. For now, though, if both companies choose to go forward with a true try at a merger, it looks like their odds of approval are much better now than they were decades before. The entire television industry has changed, and the nature of the competition has changed, too.
If the merger goes through, what will it mean for television consumers? For the stock market, the news came positively for Dish Network. Its stock jumped by 3% after the initial reports. This could mean that there’s a positive slant to the way the public would view a merger between these two. Both would bring their own philosophies into the satellite TV market and perhaps form a strong competitor against the many streaming services that have since taken over in the last decade. Unlike last time, a merger might mean stronger competition among television services.
In the coming months, talks will continue and either go forward or break down. That’s a certainty. If they go forward, it will then be up to the DOJ as to whether or not this is a done deal or another false alarm. Dish Network and DirecTV continue to be competitors for now, competing against an entire legion of mobile entertainment. By the end of the year, they might be teammates giving television consumers yet another way to enjoy their binges on today’s most beloved television shows. Decisions and news won’t come quickly. As we all know, the television industry takes its entertainment very seriously. And the DOJ takes antitrust laws very seriously.
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