DirecTV and Dish have been trying to merge for years. The time has finally come.

Another major media takeover has finally been confirmed.

Satellite television provider DirecTV (T, TPG) said Monday that it will buy rival Dish Network (SATS), including Dish's streaming brand Sling TV, in a debt swap transaction. Financial details were not disclosed.

The deal, which still requires regulatory approval, is expected to create one of the largest pay-TV providers in the country.

“The combination of DirecTV and Dish will benefit U.S. video consumers by creating stronger competitive power in a video industry dominated by streaming services from major technology companies and programmers,” the companies said in a joint statement.

Shares of EchoStar, the owner of Dish Network, fell more than 11% on Monday following the news. The stock was up nearly 10% on Friday after takeover rumors intensified.

Monday's confirmation of the deal represents a full-circle moment after both companies discussed a potential merger more than two decades ago.

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,” MoffettNathanson analyst Craig Moffett wrote in an email to clients before the deal was confirmed. But the analyst also warned that “synergies would likely be much more limited than one might imagine.”

He 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 each capture so little gross increase that a reduction, perhaps even half, wouldn’t make much of a difference.”

Still, the deal will help ease EchoStar's heavy debt load while reducing 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 around $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.

Amid these difficulties, AT&T announced Monday that it would sell its entire 70 percent stake to TPG for $7.6 billion, allowing the telecom operator to exit the TV business entirely. The company had previously agreed to retain its stake in DirecTV for a period of three years, expiring on July 31.

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The deal, which the company said will allow it to strengthen its balance sheet and focus on 5G wireless and fiber connectivity, is expected to close in the second half of next year.

“We view this transaction as slightly negative for AT&T,” KeyBanc analyst Brandon Nispel wrote on Monday, estimating that about $3 billion of AT&T’s roughly $17.5 billion in mid-2024 free cash flow came from DirecTV.

“Without that, we think AT&T looks more expensive to investors on a (free cash flow) basis,” Nispel said. “Still, we think this is ultimately a good thing for AT&T as it ends the entertainment phase and focuses AT&T's cash flow more toward wireless and fiber.”

Ultimately, analysts are divided about what the deal could mean for the future of media.

Nispel argued that a Dish-DirecTV merger could be negative for the industry because the company would have increased negotiating leverage with programmers over contract renewals.

“We believe this could lead to more contentious affiliate renewals and possible outages, while also likely limiting increases in affiliate fees for programmers,” he said.

Moffett, meanwhile, wrote in an updated note Monday that “not much will change for media companies.”

“Carriage agreements with DirecTV and Dish have foreshadowed the likelihood of a merger for nearly two decades,” he argued. “We wouldn't expect anyone to allow the kind of pick-and-choose provisions that once played a role in major cable mergers. And keep in mind that the combined company will be smaller than DirecTV or Dish were on their own just a few years ago.”

All in all, Moffett said it was clear there should be an agreement between the two as “consolidation is always to be expected in a time of secular decline.”

“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.”

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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