Satellite TV giant DirecTV will acquire its longtime rival Dish TV along with Sling TV for a payment of $1 and assume about $9.8 billion in debt.

The deal announced Monday will see DirecTV acquire Dish and Sling from current owner EchoStar. The move, which has been years in the making, aims to address the growing challenge from streaming services like Netflix and Hulu, which have steadily eaten into the traditional pay-TV market.

The idea of ​​a DirecTV-Dish merger has been floating around for over two decades, with a previous attempt in 2002 being blocked by the Federal Communications Commission (FCC) due to antitrust concerns. However, as the industry has changed drastically since then – particularly as more consumers opt for streaming services via satellite – the latest deal may have a better chance of receiving regulatory approval.

DirecTV said Monday it hopes the acquisition will allow it to offer smaller, cheaper content packages, providing a streamlined one-stop shop for entertainment.

Newsweek DirecTV emailed DirecTV for comment Monday.

DirecTV CEO Bill Morrow said he viewed the deal as an opportunity to meet the growing number of customers who have turned away from traditional satellite services in favor of streaming. The company and Dish have collectively lost 63 percent of their satellite customers since 2016, according to DirecTV.

“DirecTV operates in a highly competitive video distribution industry,” Morrow said in a statement. “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.”

Meanwhile, EchoStar stands to benefit from Dish’s divestiture as the company faces increasing financial difficulties. EchoStar, which also owns wireless carrier Boost Mobile, is struggling with shrinking cash reserves and looming debt. According to recent filings, the company had just $521 million in cash, with more than $1.98 billion in debt coming due as of November.

Hamid Akhavan, president and CEO of EchoStar, expressed optimism about the transaction.

“With an improved financial profile, we will be better able to further improve and deploy our nationwide 5G Open RAN radio network,” Akhavan said. “This will give U.S. wireless customers more choice and help drive innovation faster.”

“We want to win in the mobile business, there is no doubt about that,” Akhavan added, noting that additional funding may be needed to achieve its broader business goals.

Despite the announcement, EchoStar’s stock took a hit, falling over 13 percent as of Monday morning.

The merger between DirecTV and Dish is expected to close by the end of 2025, subject to regulatory approvals and the restructuring of Dish’s debt, including the write-off of $1.6 billion to bondholders. Upon closing, the newly formed company will be headquartered in El Segundo, California.

The acquisition comes at a time of significant change for DirecTV’s former parent company, AT&T. On the same day as DirecTV’s announcement, AT&T said it would sell its remaining 70 percent stake in the satellite company to private equity firm TPG for a reported $7.6 billion. This sale marks AT&T’s exit from the entertainment sector, a business the company once dominated.

AT&T originally acquired DirecTV in 2015 for $48.5 billion, but began reducing its exposure after suffering customer losses. By 2021, AT&T sold a 30 percent stake in DirecTV to TPG for $16.25 billion. The final sale of AT&T shares will be completed in the second half of 2025, with incremental payments over the next few years.

This article contains reporting from The Associated Press.