Dish and DirecTV Near a Deal to Combine (Again)

Business has gotten only more difficult for Charlie Ergen, the founder of the satellite TV giant Dish, since the government blocked his bid to combine his company with DirecTV in 2002.

Since then, streaming services have demolished the traditional TV industry. Cable and satellite companies have lost about 30 million customers, leaving just 50 million. And the outlook for traditional providers has grown so dire that Ergen warned two years ago that Dish and DirecTV were likely to “melt away” without a deal.

The challenges ahead look just as worrisome. Dish’s parent company, EchoStar, sought to fend off declines in Dish’s business by spending billions building out a 5G wireless cellphone network. It now faces the prospect of fending off slicker, faster competitors like Elon Musk’s Starlink and Amazon’s Project Kuiper, which put its first satellites in space last year.

So Dish and DirecTV are giving a tie-up another try. DirecTV is in the advanced stages of acquiring Dish, two people familiar with the situation told DealBook, requesting anonymity to discuss confidential negotiations. News of the merger discussions, which could still fall apart, was reported earlier by Bloomberg.

The latest attempt underscores how much the entertainment industry has shifted over the last two decades. And it raises a perhaps more thorny question: Did the government fail to see how the TV market was changing when it blocked the deal the last time?

The television landscape looks nothing like it did 22 years ago. Back in 2002, the Justice Department and the Federal Communications Commission worried that a merger between Dish and DirecTV would hurt rural subscribers. But many out-of-the-way pockets of the United States no longer rely on the satellite companies as the sole providers of TV. Broadband access has exploded as companies like Comcast and Charter have expanded further.