DirecTV and Dish have been trying to merge for years. It could finally happen.

Another major media merger could be on the horizon.

Satellite TV providers DirecTV (T, TPG) and Dish Network (SATS) are reportedly in advanced merger discussions, according to The Wall Street Journal. If the deal is completed, it would create one of the largest pay-TV providers in the country. It is unclear which company would be the buyer and how much the deal would be worth.

This is not the first time the two companies have discussed a possible merger.

In 2002, the Federal Communications Commission (FCC) blocked a proposal to merge the two companies, citing antitrust concerns. But this time the environment is very different, as subscriber losses have increased and more consumers are forgoing lower-cost streaming services.

“It is hard to imagine regulators would block a deal,” Craig Moffett, an analyst at MoffettNathanson, wrote in an email to clients. “But the synergies would probably be much more limited than you can imagine.”

Moffett pointed to the companies' vastly different satellite portfolios, which he said were not “remotely” worth reconfiguring to make them consistent.

“The biggest synergy would once have been eliminating the customer churn that comes with customers moving back and forth between the two companies,” he said. “But today they record so few gross additions each that a reduction, perhaps even half, wouldn’t make much of a difference.”

DirecTV and Dish did not immediately respond to Yahoo Finance's request for comment on the Wall Street Journal report.

Shares of EchoStar, which owns Dish Network, rose about 10% on Friday after takeover rumors intensified. The deal, which would also include Dish's Sling TV streaming brand, could help ease EchoStar's heavy debt load, the Journal noted.

Meanwhile, a deal would also help reduce costs for DirecTV's owners. AT&T spun off DirecTV in 2021 and put it into a joint venture with private equity investor TPG. At the time, it was valued at about $16 billion, with the telecom giant taking a $15.5 billion impairment charge in 2020 to offset subscriber losses.

DirecTV suffered another blow after it lost its coveted Sunday ticket package to Alphabet's YouTube TV (GOOGL, GOOG) in late 2022.

“It's hard to argue that a merger shouldn't happen; it clearly should take place. Consolidation in a time of secular decline is always to be expected,” Moffett said in his note. “But it would be a mistake to overestimate its importance. Extending the expected lifespan of satellite television by approximately one year will not change the perspective for programmers, distributors or even satellite television.”

The story continues

Alexandra is a senior reporter at Yahoo Finance. Follow her on X @alliecanal8193 and send her an email at [email protected]

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