The US Department of Justice (DoJ) has ruled out any sort of merger between Charlie Ergen’s Dish Network and arch-rival AT&T’s DirecTV.
The two pay-TV giants are both losing subscribers and a merger between them has long been mooted, not least by Ergen who has frequently said that a merger was inevitable.
However, the New York Post reports that DoJ regulators in its antitrust division recently informed executives of AT&T that a marriage between DirecTV and Dish would likely have to wait until faster 5G wireless service is more widely available in rural markets. The Post adds that regulators remain concerned that a union could lead to higher prices in areas lacking high-speed Internet access, including tribal lands.
The news will certainly influence AT&T’s thinking. AT&T is widely reported to be inviting bids for its DirecTV subsidiary, and knowing that they have to secure a buyer which excludes Ergen and thus avoids a protracted period of argument and negotiation with the DoJ.
Five years ago AT&T paid $49 billion for DirecTV. Removing Ergen – potentially a willing buyer – might reduce the price it now receives from potential buyers. The New York Post talks of bids of just $16 billion.