Satellite TV provider DirecTV has agreed to buy longtime competitor Dish Network, throwing a lifeline to the troubled Colorado-based broadcaster that helped pioneer the industry. The proposed consolidation, announced early Monday, highlights the challenges facing traditional television. DirecTV agreed to assume Dish’s net debt and pay just $1 for Dish’s satellite TV business and streaming service Sling TV — a startling admission about the fading prospects of the once prominent satellite television provider and its Englewood, Colo.
-based parent, EchoStar Communications. The deal is expected to unfold in two separate transactions. Private equity firm TPG plans to acquire AT&T’s majority stake in DirecTV, giving TPG full ownership of the El Segundo-based company.
Separately, DirecTV agreed to assume $9.9 billion of Dish’s debt at the close of the EchoStar transaction. The proposed takeover, structured as a debt exchange, would allow DirecTV to boost its subscriber count with Dish’s more than 8 million homes.
DirecTV currently has about 10 million subscribers for its namesake service and U-Verse. “We think this is the right deal for consumers,” DirecTV Chief Executive Bill Morrow said in an interview. “We think [satellite TV] has a greater life and a greater value than most people realize.
” The deal includes arrangements for EchoStar to quickly receive a $2.5-billion loan so it can restructure debt. The cash infusion is designed to help EchoStar and its billio.