Dish Floats DirecTV Merger, Because What's A Little Mindless Monopolization Among Friends?
from the merge-ALL-the-things dept
We just got done with AT&T's $86 billion merger with Time Warner, a deal that immediately drove up costs for consumers and competitors alike. That was followed up with the recent approval of T-Mobile's $26 billion merger with Sprint, another deal the lion's share of objective experts say will reduce competition, raise rates, and end with thousands of pink slips as redundant positions are inevitably eliminated.
With the ink barely dry on both deals, Dish CEO Charlie Ergen is now (once again) floating a merger with DirecTV, insisting that such a union is "inevitable" as the company continues to reel from TV cord cutting. As the US press loves to do, the proposal was parroted rather unskeptically as a seemingly good idea:
"Ergen also on the call said a long-rumored merger of DirecTV and Dish was "inevitable" — despite reticence from AT&T to divest itself of the asset — as neither satellite TV-delivered linear TV service was growing..."You just can't swim upstream against a real tide of big players," Ergen argued. If AT&T eyes possible buyers for DirecTV, Dish is seen as an obvious suitor, especially after it tried and failed to merge with the satellite TV provider in 2002. Ergen on the afternoon analyst call also made another overture to the Sinclair Broadcast Group to possibly conclude a deal that would see the former Fox Regional Sports Networks return to his distribution platforms."
To be clear, AT&T isn't likely to sell, but in the wake of recent court rulings and mindless M&A mania you can't rule anything out. AT&T bought DirecTV to gain additional scale and leverage in programming negotiations. Even with the service bleeding TV subscribers, it's not likely that it would want to offload DirecTV to Dish anytime soon, as it wants to slowly convert those satellite TV users to AT&T streaming subscribers. AT&T's also facing a massive merger backlash for $150 billion in debt caused by its costly obsession with merger mania, likely making AT&T sheepish.
You used to be able to look at a deal proposal like this and laugh at the mere mention of it, knowing it would likely be blocked. But in the wake of the utterly myopic and idiotic court rulings governing both the Time Warner/AT&T and Sprint/T-Mobile deals (in which mountains of evidence of market harm were almost flippantly and cheerfully ignored), you really can no longer make those assumptions. The US loves it some mindless merger mania; almost as much as it loves ignoring the monopolistic damage such deals cause on tech markets and consumers alike.
Merging AT&T directly with Dish, the only way this deal actually gets done, creates layers of problems. To get the T-Mobile merger approved, the DOJ signed off on a plan that would shovel some T-Mobile spectrum over to Dish Network, which would (theoretically) then build a replacement wireless carrier to Sprint over a period of seven years. Analysts and antitrust experts are already hugely doubtful that network ever gets built. But it would be even less likely to get built should Dish be sold to DirecTV/AT&T, which has a vested interest in ensuring a fourth replacement wireless competitor never materializes.
This deal probably never happens. Dish and DirecTV have floated these kinds of rumors for years just to fluff their stock valuations. Still, recent antitrust enforcement decisions have shown there's no bottom to US M&A myopia, meaning you can't rule such a deal out. Wall Street and executive desires seemingly mute all common sense and any interest in historical context, ensuring we learn absolutely nothing from history as we repeat the same mistakes over, and over, and over again.
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Filed Under: antitrust, charlie ergen, competition, consolidation, doj, ftc, satellite tv
Companies: at&t, directv, dish
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Misery loves company
Charlie Ergen says the shipping industry is sinking, but our ships are still barely afloat. So let us merge with all the others in the shipping industry to take advantage of economies of scale so we can go down together. How many shares of our fantastic new conglomerate would you like?
/s
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Re: Misery loves company
Are you sure?
There's a call transcript available in which Ergen say a merger will "make some sense" before describing it as inevitable. I thought there was a higher standard of fiduciary duty to the shareholders.
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Re: Re: Misery loves company
Of course there is. The issue comes in priorities. Golden parachutes first, executive bonuses second, settling bankruptcies third (while cleaning out pension accounts and converting assets to fund 1&2), and leaving dregs to investors fourth. Then they think about the employees.
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Buy low and sell high sans ethics, a time honored way to swindle a country out of a future.
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Re:
"Buy low and sell high"
This is not a problem in itself
"sans ethics"
Here is a problem
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NY AG should relook at the appeal
The judge who ruled for the TMOBILE/Sprint merger cited that there was no evidence that Dish wouldn't build a compting service.
This statement by the Dish CEO puts the lie to claim. Dish does not expect to be able to survive unless they merge with DirectTV. How can they get the funding to develop a robust competitor to 3 companies so big it is impossible to compete (The whole reason we are supposed to ignore the historical evidence of why the merger is a bad idea is that TMobile Needs to be bigger to actually compete.)? Answer: We can't. The judge's reasoning didn't last a month. Emergency Appeal, new evidence has been submitted by the dish CEO that shows that dish is unlikely to become a competitor in the space.
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Still don't get it
150 Billion in debt ?
Think how much infrastructure they could have built with that. More customers, better service and still make a profit.
Talk about missing the point
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Re: Still don't get it
That's not the goal here at all.
The goal is to milk this satellite cow and then leave it dead by the side of the road after they've stripped the carcass to the bone and then sell the company stock in some synergy bullshit spin-off to some sucker after they've given themselves as many performance bonuses, buybacks, buyouts and golden parachutes as the "Board of Directors" will allow.
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Re: Re: Still don't get it
I hear Verizon likes buying carcasses.
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Re: Re: Still don't get it
Oh, and I left out the part about strip-mining the pension and health care money buckets and stuffing them full of worthless Wall Street "investment assetts" and IOU's.
Gotta stay competitive America.
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And AT&T lost my business over their merger mania. AT&T started raising prices for service, taking things away that increased their bottom line such as prorating your refund depending on days used of their product in favor of you loosing money over days not used between their billing cycle and the time you terminated.
On the whole getting poorer and poorer service while increasing the price with no benefits at all to having to pay more. They can continue to jack up their prices while trimming their services. I'm just not going to be the one to pay for their foolish debt they made.
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Ma Bell rising from the grave, more powerful than ever. Give it a few more years and we'll have unkillable super Ma Bell.
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Consider.
Placing a large Sat up in earth orbit that does only 1 thing.
Wouldnt it be better to give it 2-3-4 other options??
Other countries have sent up Sats, insted of installing 1000+ local antenna's around a country.. Easier to control, harder to Hack or destroy. With no need to decode much, its free.
But the USA ones should have other purpose besides Just TV. like digital signal sourcing to Cable corps? The highest location to receive Digital signals from spy's?
How old is this tech, now? Im not sure if they have replaced them more then 1 time, in the past.. And if its recent, what an upgrade.
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And.
https://qz.com/1480089/att-just-declared-the-end-of-the-satellite-tv-era-in-the-us/
“We’ve launched our last satellite,” John Donovan, CEO of AT&T Communications, said in a meeting with analysts on Nov. 29.
The AT&T executive effectively declared the end of the satellite-TV era with that statement. AT&T owns DirecTV, the US’s largest satellite company—and second largest TV provider overall, behind Comcast.
DirecTV will continue offering satellite-TV service—it had nearly 20 million satellite video subscribers as of September, per company filings. But the company will focus on growing its online video business instead, Donovan said. It has a new set-top box, where people can get the same TV service they’d get with satellite, through an internet-connected box they can install themselves.
11/30/2018
An we thought they were stupid??
I would suggest something like using the Sat to send Highspeed Down loads to customers, while using Cable to wonder the net..
BUT I dont think they understnad that idea.
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Those who do not learn from history...
https://www.wired.com/2007/02/10-things-you-m/
Incompatible hardware - check.
Different orbits - check.
Different deals with feed sources (and contracts on both) - check.
Channels will die - check.
DirecTV/Dish merging would be an obvious repeat of the Sirius/XM merge. Consumers pay more for "new" receivers, get less channels, pay more, and people lose jobs as half the ground stations and datacenters are shuttered.
E
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It's extremely weird that there are simultaneous broadcasts of the same channels, from two satellites. It's obviously inefficient. Combined, they could offer some real 4K content.
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