Slowly Losing the Satellite Wars

The pay-TV industry has been declining for years, and none have felt the pain more than satellite TV providers. EchoStar, the company behind Dish Network, is in advanced talks to sell its satellite TV business to rival DirecTV. The possible deal comes with a looming debt payment of $1.98 billion in November, which EchoStar's struggling cash flow makes it difficult to meet.

The idea of combining Dish and DirecTV is not new. In fact, the two companies were close to merging back in 2002, but regulatory issues led to the deal falling through. This time around, the motivation is more financial, as EchoStar is desperate to pay off its debt. With a shaky cash reserve and predicted negative cash flow for the rest of the year, a deal with DirecTV may be EchoStar's only hope. In an all-cash deal, DirecTV would be paying EchoStar for its satellite TV business, digital business Sling, and associated liabilities. The total transaction value could be over $9 billion. Despite the possible deal, EchoStar's future remains uncertain. The company has been trying to refinance some of its debt, but negotiations have so far been unsuccessful.

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