EchoStar to sell Dish to DirecTV, combining major pay-TV providers

EchoStar is selling its Dish TV provider and digital business Sling to rival DirecTV in a deal announced Monday that brings together two of the largest pay-TV providers, and sent EchoStar shares plunging 10%.

DirecTV agreed to pay a nominal fee of $1 for Dish. The deal will see DirecTV assume about $9.75 billion in debt and is contingent on consent from some of Dish's bondholders, according to a news release.

The deal is expected to close in the fourth quarter of 2025. Combined, DirecTV and Dish will serve close to 20 million customers, according to Reuters.

"This was the right time to bring the companies together so we could create a company that ultimately had enough ability to negotiate better deals with the programmers and bring smaller packages to the market, more bite-sized packages, which the consumers are asking for," EchoStar CEO Hamid Akhavan told CNBC's "Squawk on the Street" on Monday.

"I think this was a scale game that kind of puts us in a level playing field with the competitors in the market," he said.

The content distribution industry as a whole has been on a major decline, Akhavan said, and distribution companies such as Dish and DirecTV have fallen behind other platforms with newer technologies and wider reach.

He also said EchoStar was not able to fully support both its video distribution and core wireless internet businesses, and that this merger will allow the company to put all of its resources toward its core services.

Also on Monday, AT&T announced it would sell its entire 70% stake in DirecTV to private equity firm TPG for $7.9 billion. The company sold 30% of its stake to TPG in 2021, then valued at $16.2 billion. AT&T originally bought DirecTV in 2014 for $48.5 billion.

The possibility of a merger