Satellite television giant DirecTV and Charlie Ergen’s EchoStar announced Monday that they have entered into a deal under which DirecTV will acquire EchoStar’s video distribution business Dish DBS, including Dish TV and Sling TV, through a debt swap transaction. DirecTV will pay EchoStar $1 plus the assumption of debt.

The landmark deal was decades in the making and effectively resulted in the merger of satellite TV giants DirecTV and Dish. If approved by regulators, this would create the largest pay-TV provider in the United States

DirecTV is owned by AT&T and private equity firm TPG, while EchoStar is publicly traded. Together, the companies would have about 20 million pay-TV subscribers, millions more than any other pay-TV company (Charter and Comcast have just over 12 million each). DirecTV estimates the merger has the potential to generate cost synergies of at least $1 billion per year.

Notably, TPG also said it had entered into a deal to acquire the 70 percent of DirecTV currently owned by AT&T. Once completed, AT&T will officially exit the TV business after WarnerMedia was spun off to Discovery two years ago. Although they will no longer own it, DirecTV CEO Bill Morrow said the company will continue to have “an ongoing relationship” with AT&T around the sale of other services.

The merger took years, and the companies had already agreed to merge in 2001. The Justice Department killed that deal because of an antitrust lawsuit.

The year 2024 is, of course, a far cry from 2001. Cord-cutting has devastated the pay-TV business, and satellite TV companies have been hit particularly hard. While cable companies have been able to pivot to broadband Internet and mobile services, Dish and DirecTV have remained focused on television, even as subscriber numbers decline.

And streaming options like YouTube TV and Hulu with live TV have increased the competitive landscape. Both DirecTV and Dish have their own streaming packages.

The companies referred to this competition in their announcement in order to forestall regulatory issues.

“Streaming services owned by major technology companies and programmers now have subscriber numbers that far exceed those of pay-TV providers,” the press release said. “Content that has historically been the staple of traditional pay TV – news, sports and entertainment – ​​is now available exclusively or for the first time through direct-to-consumer streaming services.”

The merger “will benefit U.S. video consumers by creating greater competitive power in a video industry dominated by streaming services from major technology companies and programmers,” the companies said. “The transaction will provide consumers with compelling video options while enhancing EchoStar’s financial profile as the company continues to expand and expand its nationwide 5G Open RAN wireless network.”

Back in 2020, Dish Chairman Charlie Ergen called a merger “inevitable,” and two years later he argued that such a deal could happen “in the near term.” That time has apparently now come.

The question is whether regulators will step in as they did two decades ago or allow satellite TV consolidation to take shape.

One of the goals as a combined company is to be able to offer smaller packages at lower prices, “which is exactly what consumers have told us they want,” Morrow said in a phone call after the announcement. This follows the deal DirecTV struck with Disney earlier this month, which saw it offer sleeker, genre-based packages following a carriage dispute.

“DirecTV operates in a highly competitive video distribution industry,” said Morrow. “We expect that with increased scale, DirecTV and Dish will be better able to work with programmers to achieve our vision for the future of television, which is to aggregate, curate and distribute content targeted to the Customers’ interests and to become better positioned to achieve operational efficiencies while creating additional value for customers through additional investments.”

Hamid Akhavan, President and CEO of EchoStar, added: “This agreement is in the best interests of EchoStar’s customers, shareholders, bondholders, employees and partners. With an improved financial profile, we are better positioned to further enhance and deploy our nationwide 5G Open RAN wireless network. This will provide U.S. wireless customers with greater choice and help drive innovation faster. We expect that bondholders of Dish and EchoStar will benefit from two companies with stronger financial profiles and more sustainable capital structures.”

If everything goes as planned, the transaction is expected to close in the fourth quarter of 2025.

Caitlin Huston contributed to this report.