DIRECTV to Acquire EchoStar's Video Distribution Business, Including DISH TV and Sling TV
Will Provide
DIRECTV Will Be Better Able to Work with Programmers to Deliver to Consumers Smaller Content Packages at Lower Price Points
Combined Company Will Be Better Able to Bring Together Multiple Content Sources in
Improves
DIRECTV to Host Conference Call Today at
"DIRECTV operates in a highly competitive video distribution industry," said
"This agreement is in the best interests of
"DIRECTV was founded 30 years ago to give consumers greater choices than incumbent cable companies for video content, and the Company's acquisition of DISH TV and Sling TV positions it to again provide more choices and better value in an industry currently dominated by large streaming platforms," said
Compelling Transaction Benefits
A combination of DIRECTV and DISH will help the new company provide consumers with more choices and better value. The combined video company is expected to:
- Have increased scale to incentivize programmers to allow DIRECTV to deliver smaller packages at lower price points.
- Be better positioned to bring together multiple content sources in one easily accessible place.
- Have an enhanced ability to make the investments required to improve its streaming services.
- Improve the viability of the satellite platform by realizing efficiencies of some shared fixed infrastructure and operating expenses.
- Continue to provide the broadest array of programming and diverse voices available on pay TV, including local news.
The transaction will also benefit
- Alleviate a material portion of
EchoStar's financial constraints.
- Free up operational and financial resources that
EchoStar can dedicate to its mission of deploying a nationwide facilities-based wireless service to compete with dominant incumbent wireless carriers.
- Benefit consumers by enabling
EchoStar (through its Boost Mobile brand) to strengthen its position as the fourth facilities-based carrier in theU.S.
- Enable
EchoStar to further leverage its satellite assets and experience, including developing innovative direct-to-device (D2D) solutions.
Highly Competitive Industry
The video distribution industry has undergone a massive transformation and is highly competitive, now dominated by streaming services owned by large tech companies and programmers.
- Streaming services owned by large tech companies and programmers now have subscription numbers that far exceed those of pay TV distributors.
- Content that was historically the mainstay of traditional pay TV – news, sports, and entertainment – is now available exclusively or first-run on direct-to-consumer streaming services.
- The vast majority of consumers who leave satellite video are "cutting the cord" for streaming services – wherever they live.
- Combined, DIRECTV and DISH have collectively lost 63% of their satellite customers since 2016.
- Traditional pay TV penetration in
U.S. households is now less than 50%.
- Combined, DIRECTV and DISH have collectively lost 63% of their satellite customers since 2016.
Improve Both Companies' Financial Profiles
The transaction is expected to strengthen the financial profiles of DIRECTV and
- Upon transaction close, DIRECTV expects to have a leverage position just over 2.0x, and plans to reduce to under 2.0x within 12 months, consistent with its stated 1.5x - 2.0x financial policy on a pro forma basis. As a result, DIRECTV will have one of the best leverage profiles in the pay TV industry.
- DIRECTV estimates that the combination of DIRECTV and DISH has the potential to generate cost synergies of at least
$1 billion per annum. These synergies are expected to be achieved by the third anniversary of closing, assuming the closing is in late 2025.1
- The transaction will provide
EchoStar with greater financial flexibility by improving its access to capital and reducing overall refinancing needs.- At close,
EchoStar will have reduced its total consolidated debt (excluding financing leases and other notes payable) by approximately $11.7 billion and reduced its consolidated refinancing needs through 2026 by approximately $6.7 billion (excluding financing leases and other notes payable).
- The transaction, in conjunction with the exchange offer announced today (the "Exchange Offer"), will also result in the termination of all Intercompany Obligations between DISH Network and DISH DBS and creates the ability for
EchoStar to fully unencumber the 3.45-3.55 GHz spectrum, unlocking incremental strategic and operating flexibility.
- At close,
Transaction Details
Under the terms of the purchase agreement, DIRECTV will acquire EchoStar's video distribution business, including DISH TV and Sling TV, in exchange for a nominal consideration of
The transaction is subject to various closing conditions, including, but not limited to, a requisite amount of the outstanding DISH DBS notes being tendered into the Exchange Offer, completion of a pre-closing reorganization, and receipt of required regulatory approvals.
In addition, TPG
"We built our business to provide bespoke financing solutions. We are pleased to partner with DIRECTV and DISH DBS on a transaction that is value-enhancing for all stakeholders," said
Leadership and Corporate Governance
Upon closing of this transaction, DIRECTV will be led by a proven management team that reflects the strengths and capabilities of both organizations. DIRECTV will continue to be led by Bill Morrow, DIRECTV's Chief Executive Officer, and
For more information on the terms of the change in ownership, please review the press release.
Timing and Approvals
The transaction, which the boards of directors of both companies have unanimously approved, is expected to close in the fourth quarter of 2025, subject to the receipt of regulatory approvals, the successful closing of the Exchange Offer, and the satisfaction of other customary closing conditions.
Please visit www.BrighterTVFuture.com for more information and updates about the transaction.
Advisors
PJT Partners is acting as lead financial advisor to DIRECTV. Barclays is acting as lead financial advisor to TPG. J.P. Morgan is acting as lead financial advisor to
Respective Conference Call and Webcast Details
DIRECTV Details:
Time:
Dial-In: 1-833-470-1428
Conference ID: 751806
Webcast: https://www.netroadshow.com/events/login?show=b9ad3e01&confId=71772
EchoStar Details:
Time:
Dial-In: (877) 484-6065 (
Conference ID: 13749306
Presentation/Details: ir.echostar.com
About DIRECTV
As a leader in sports and entertainment for 30 years, DIRECTV provides industry-leading content and an amazing user experience with or without a satellite. By reimagining what is possible, DIRECTV's mission is to aggregate, curate and deliver exceptional, innovative service tailored to customers' interests. In 2023, DIRECTV elevated the customer experience by delivering Gemini, which can integrate customers' content from their third-party streaming services onto a single one-stop, digital experience. At DIRECTV, the sports season never ends, and customers are treated to broadcasts of several major sports, including the NFL, MLB, NBA, NHL, and multiple domestic and international soccer leagues. DIRECTV provides customers the choice of watching sports, movies, and TV shows on their TVs at home or their favorite mobile devices via the DIRECTV app.
About
©2024
Additional Information About the Transaction and Where to Find It
This press release references certain terms of the Exchange Offer but does not purport to be a comprehensive summary of the terms of the Exchange Offer. This press release shall not constitute an offer to sell, or a solicitation of an offer to purchase, any securities and, shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
Forward-Looking Statements
This press release has been prepared by DIRECTV ("we", "us" or the "Company") for informational purposes only and for the exclusive use of the recipient. All statements other than statements of historical fact included in this press release are forward-looking statements, which are subject to risks and uncertainties. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business, including the pending acquisition of DBS. These forward-looking statements are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions. In particular, the estimated cost synergies disclosed herein were projected by DIRECTV's management. DIRECTV may fail to realize, or not realize in the amounts anticipated or within the expected timeframe, the estimated synergies, because, among other factors, these cost synergies may require capital investment or integration expenses, and many of these cost savings can only be realized following negotiations with third parties, whose support and cooperation cannot be assured. We operate in a highly competitive, consumer and technology driven and rapidly changing business, regulatory and various other factors could adversely affect our business, financial condition and results of operations in the future and cause our actual results to differ materially from those contained in the forward-looking statements. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements. Should one or more of these uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. Factors or events that could cause our actual operating and financial performance to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
Contacts
DIRECTV
Investor Contact:
investors@directv.com
Media Contact:
media@directv.com
Investor and Media Contact:
news@dish.com
1 DIRECTV's estimate of cost synergies consists, among other factors, of selling, general and administrative savings (including from reduction in overhead expenses, elimination of overlapping support functions, consolidation of customer support resources and rationalization of sales force), technological and engineering savings (including from elimination of duplicate tech investments, consolidation of service platforms, upgrading to more efficient technical services and digitization of billing and collection processes), as well as content and procurement savings (including by benefiting from preferential rates, elimination of overlapping contracts, improved ability to repackage channels and reduction in rate card disparities). Any potential synergies will be realized over time, and may require capital investment or integration expenses, or negotiations with third parties which may not be successful and may be offset by subscriber losses or increased costs and expenses. Cost synergies assume a closing date by
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SOURCE DIRECTV