DirecTV and Dish Merger Would Hurt AT&T, Analyst Says

While decision makers for AT&T and Dish Network are reportedly open to combining their eroding satellite TV operations, such a deal would not be favorable for AT&T, according to JPMorgan analyst Philip Cusick.

“We believe the dis-synergies of pulling DirecTV away from AT&T’s U-verse in buying power would be value destructive,”Cusick said in a note to investors today.

Bloomberg reported Friday, citing unnamed sources, that both companies have yet to hold talks, but that the idea of merging DirecTV and Dish wasn’t objectionable. Regulators stopped such a deal from occurring back in 2002, citing consumer harm. But with both DirecTV and Dish each losing hundreds of thousands of subscribers each quarter, there’s speculation that the FCC and Justice Department might view it differently this time around.

Notably, Cusick said there are still “personality and regulatory issues” associate with such a merger.

Combining DirecTV satellite and Dish would create the largest pay TV operator in the U.S., with 28.3 million subscribers. That scale would help both companies, which together shed more than 2.4 million users last year.

However, it would also harm the buying power of AT&T’s also eroding U-verse platform, which actually grew a little in 2018 but is down to just over 3.7 million subscribers. Same with the DirecTV Now virtual platform

Cusick, however, is in favor of a deal that adds U-verse and DirecTV Now to the mix. 

Daniel Frankel

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!