It should not be forgotten in the acres of business news coverage over the DirecTV (and TPG) acquisition of DISH Network that in selling DISH, chairman Charlie Ergen is very much giving up his ‘baby’. When his EchoStar 1 satellite was launched on a Chinese Long March rocket in 1995 Ergen was in the launch control room, and TV cameras captured him with tears streaming down his face.

The Lockheed Martin-built satellite formed the basis of Ergen’s fortune, and was followed by others and helping Ergen, his wife Candy and co-founder of EchoStar Jim DeFranco achieve spectacular financial security. However, the decline in DISH’s subscriber numbers and consequent fall in share prices has reduced Ergen’s net worth from an impressive $20 billion in 2015 to $3.2 billion in 2023.

The DirecTV/DISH deal still leaves considerable advantages for Eren’s parent company EchoStar. First, he reduces his debt obligations by a massive $7 billion, removes the very real prospects of bankruptcy for EchoStar and at the same time leaves Ergen with some very juicy assets.

For example, EchoStar retains all the satellite frequencies. Even the uplinks that DirecTV needs to continue operation of EchoStar’s DTH satellites will return to EchoStar once DirecTV completes the rationalisation of the joint fleets.

“No spectrum assets are leaving our business with the DBS transaction,” Akhavan told analysts following the deal’s announcement. “All will remain with EchoStar”.

EchoStar also has a global footprint of S-band spectrum. It says it will launch a satellite constellation for Internet of Things and Direct-to-Device (D2D) connectivity.

“We have global ownership rights to the same spectrum around the world. We are the only company that can make that claim. We intend to use that strategic asset to its fullest,” added Akhavan.

While some might argue as to the potential size of this market, and it is a somewhat crowded area given the presence of Starlink, AST SpaceMobile and others, but Akhavan told analysts that with EchoStar now emerging the business is on a much more secure financial footing and would make D2D a priority.

“We have refocused our portfolio on wireless and satellite connectivity markets,” Akhavan said. “Up to now we have been a mixed combination of growth, with mobile and satellite; and the declining but significant cash-generating pay-TV business. The remaining businesses of EchoStar becomes a growth profile.”

“In terms of direct to device, this is a very large undertaking when it comes to the magnitude of the technology and the investment,” Akhavan said. “We think this is one of the greatest, if not the greatest, opportunity left in this space right now in terms of its impact on consumers, its global relevance and its financial return.”

Other posts by Chris Forrester:

1. European telcos unite against Starlink D2C
2. Rivada insists “deadlines will be met”
3. Rivada’s latest problems could be fatal
4. SES confirms 25c dividend
5. Intelsat gets licence to rescue Galaxy 25
6. Bank downgrades Virgin Galactic
7. EchoStar fails to find extra cash
8. Rivada: More trouble to come?
9. IRIS2 facing more challenges

Categories: Blogs, Business, Inside Satellite, M&A

Tags: charlie ergen, directv, dish