America's Struggling Satellite TV Companies Once Again Propose A Terrible MegaMerger

Deals

from the when-in-doubt,-repeat-your-mistakes dept

For decades, like clockwork, somebody at Dish or DirecTV will try and float the idea that the two satellite TV companies should merge. Usually they’ll do this by seeding the idea at trusted news outlets that additional consolidation is just what the U.S. media sector needs. Granted regulators have always balked at the idea of a Dish and DirecTV merger, given that it would only reduce competition in the pay TV space, leading to more layoffs, more price hikes, and even worse customer service (cable TV customer service is among the worst in any industry anywhere thanks to this “growth for growth’s sake” mindset).

Like clockwork, somebody involved in the deal-making has leaked word of yet another attempt to merge the two companies to the New York Post:

“DirecTV and Dish Network are in fresh talks to merge after years of on-again, off-again wrangling and multiple clampdowns from federal antitrust officials, The Post has learned.”

Both companies have been losing TV subscribers hand over fist to streaming competitors, so the argument being seeded in the press is that the merger makes sense now because both companies are flailing, and streaming competitors now exist:

“Now, however, insiders are optimistic a Dish-DirecTV deal could pass regulatory muster as concerns about the market power of the struggling companies have waned, sources said. Some executives likewise argue that a merger could give a surprise boost to the US?s troubled rollout of 5G wireless services.”

The problem, of course, is that every time the telecom and cable industry proposes a deal like this, absolutely none of the promised synergies ever actually arrive, and the end result is almost uniformly more problems, more layoffs, and more price hikes. We just got done watching a megagermer clusterfuck for the ages in the $200 billion AT&T Time Warner and DirecTV mergers, which promised American consumers the sun, Earth, and sky. Instead we saw 50,000 layoffs, record TV defections, higher prices, and absolute chaos, forcing AT&T to recently spin off DirecTV.

Dish and DirecTV policy nerds are going to try and justify the deal this time by claiming it’s the only way to get Dish’s promised 5G network off the ground. That network, if you recall, was a half-baked Trump-era “fix” to the problems already created by the T-Mobile Sprint merger. Based on recent events that network doesn’t appear destined to succeed any way you slice it. But with Dish hemorrhaging both pay TV and wireless subscribers already, it’s short of cash. DirecTV’s fortunes aren’t looking so hot in the TikTok era either.

So instead of letting terrible companies just die at the hands of the market and shifting trends, we turn to regulators to approve terrible deals under the Charlie Brown and Lucy football type promise that this time the deal will solve everybody’s problems. But it won’t. A deal like this will just reduce competition, raise rates, and result in tens of thousands of additional layoffs. As such it’s unlikely the Biden FCC or DOJ approves it, but given this country’s severe allergy to learning from history or experience when it comes to megadeals, you can never quite be sure.

Filed Under: competition, ftc, mergers, pay tv, tv
Companies: directv, dish