DirecTV will buy rival Dish to create a massive pay-TV company after a years-long search

DirecTV is buying Dish and Sling as a company, a deal it has sought to close for years as it tries to better compete with the streaming services that have become dominant.

DirecTV announced Monday that it will acquire Dish TV and Sling TV from its owner EchoStar in a debt-swap deal that includes a $1 payment, plus an assumption of debt.

The prospect of a DirecTV-Dish combo has long been rumored, with headlines about the reported talks popping up over the years. And the two nearly merged more than two decades ago — but the Federal Communications Commission blocked their then-owners’ $18.5 billion deal, citing antitrust concerns.

The pay TV market has changed significantly since then. As more consumers tune in to online streaming giants, demand for more traditional satellites continues to decline. And while major acquisitions have proven particularly tough under the Biden-Harris administration, that could make regulators more inclined to approve the DirecTV and Dish combination this time around.

The current deal could provide a key lifeline for EchoStar. The Colorado-based telecommunications company has faced the prospect of bankruptcy as it continues to burn through cash and see accumulated losses.

In a recent securities filing, EchoStar disclosed that it has just $521 million in “cash on hand.” And the company has forecast negative cash flows for the rest of the year — while also pointing to major debt payments looming, with more than $1.98 billion of debt due in November.

Shortly before DirecTV made the announcement, AT&T said it was selling its remaining stake in DirecTV to private equity firm TPG in a deal valued at about $7.6 billion.