Dish Network is one of the leading TV providers in the United States with over 8 million customers; however, in 2022, it went through an organizational transformation as it merged with another major player, DirecTV. Several questions arise from this merger: Who is now in charge of Dish Network? And what does it mean to the consumers?
Battle Between Two Giants: Dish Network and DirecTV
In mid-September 2022 Dish Network and DirecTV stated that the two companies signed the definitive agreement for the merger of the companies they own which is estimated to be at around $16.7 billion including the debt. The main acquisitions that have taken place as a result of this merger involved the creation of a new parent company called New DirecTV which united two of the biggest satellite TV providers.
DirecTV with approximately 15 million subscribers belonged to AT&T before the merger and the new DirecTV together with AT&T has a total of over 23 million users, which makes AT&T one of the main suppliers of TV content via satellite, internet, and set-top boxes.
The declining satellite TV subscription numbers over the previous decade helped to slightly drive this trend because most customers moved to more affordable streaming platforms like Netflix and Hulu. Because of the synergies connected with larger size and better efficiency connected with comparable infrastructure and operational bases, Dish Network and DirecTV have planned to combine in a manner that would provide them a stronger position in the always-changing pay-TV industry.
Dish Network is run by a company known as DISH Network Corporation which is led by its CEO, Erik Carlson.
The ultimate parent of the merged entity is New DirecTV which is in turn owned by a group of former controlling shareholders of both Dish Network and DirecTV.
Specifically, New DirecTV is owned by the following key stakeholders:
- Chuck Ergen – Ergen is the founder of Dish Network and the former Chairman of the company and the current Executive Chairman of New DirecTV. He remains the major shareholder in the merged firm as his economic ownership stake was estimated at 26 percent.
- Negotiating, New DirecTV’s largest minority shareholder is the private equity firm TPG TPG which has an economic interest of approximately $1.8 billion or 26%.
- AT&T – However, even after divesting from DirecTV to Dish AT&T has a 71% economic interest in the new company through preferred equity and warrants.
Thus, Ergen and TPG own the controlling voting rights in New DirecTV, but, of course, AT&T still has some degree of financial involvement.
The Chief Executive Officer of New DirecTV is Bill Morrow, who took this position in September 2016, after serving as the Chief Executive Officer of AT&T’s Vril Corp., a satellite television division in Latin America, and has over 17 years of management experience in leading Vodafone’s operations in Europe.
In the new company, Ergen who will occupy the position of the Executive Chairman will be in charge of strategic planning and development. On the other hand, CEO Morrow will be responsible for the day-to-day management and the coordination of the merger between Dish Network and the DirecTV Company.
What can be Derived for Existing Clients?
For other consumers, both Dish Network and DirecTV have indicated that for now, it is “business as usual” for people who subscribe to their services. While it will be months before the two brands fully synchronize their products and services, the two will continue to run separately.
It implies that the existing customers of the companies will not be affected in any way or will not have to be inconvenienced by alterations in their service delivery due to the merger. The stated deal is probably more about cementing networks in the long haul rather than changing customer propositions in the near term.
However, the operators are sure to offer more bundling services and higher integration of networks and operations including integrated billing systems, customer service, and equipment such as set-top boxes. As for integration, subscribers can also receive additional DISH and DirecTV content in a single platform further down the road.
As for the prices, likely, they will not decrease; however, Dish’s chairman, Charlie Ergen, has agreed to ensure that the rates do not rise at the inflation rate for the next three years post-merger. Therefore, subscribers are likely to realize better long-term stability and, maybe, a slower increase in prices because of the decrease in overhead costs throughout New DirecTV.
The goal remains unclear for existing customers of both companies: the further months will show to what extent this giant merger in the industry affects work, technology, and programming. However, the consolidation appears to be promising satellite TV Subscribers some choices, bundled services, and a more desirable slow rate of cost hike as Dish Network and DirecTV merge into a satellite television behemoth under the new New DirecTV brand.
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