Last June, I suggested that DirecTV was the better of the two companies. However, Cooperman is a big believer in Ergen’s management style. The Disney deal is a specific example of Ergen’s genius. Together, with Ergen as Chairman and Mike White as CEO, the synergies alone would move the needle.
Sirius Broadcasting took 17 months to get its merger with XM Radio approved by the Federal Communications Commission, so this combination could take longer. But I don’t care how long it takes — in the end, both sets of shareholders are better served tossing in with the other.
Charlie Ergen is no dummy. If he’s pushing for this, Mike White is surely listening. A second failure could ultimately be fatal to either Dish Network or DirecTV.
I do believe the FCC will see things differently this time around.
Content Creators? Yup, They’d Be Happy
One of the biggest effects of a TWC/CMCSA merger will be the price that content creators like Disney, CBS (CBS) and all the rest are able to charge the merged entity.
A stronger Comcast will likely stand up to any fee increases proposed by content creators limiting their potential upside revenue. These firms want to be able to conduct as many negotiations as possible, playing one cable company against the next to leverage the best possible deals. As a result, you can be sure that content creators are likely going to be against a Dish Network-DirecTV merger … but they shouldn’t be.
The reason: One of them might not be around in a decade.
I know that might seem implausible, but whichever firm is able to win the Internet and wireless battles is going to be the last satellite provider standing. By coming together, the merged firm will have the financial resources necessary to compete with Comcast for exclusive content. In the end, I see content creators winning in this merger rather than losing.
Time will tell if I’m right.
There is a constant argument about development that takes place in the Toronto neighborhood where I live. Many of the long-time residents don’t want tall buildings ruining the neighborhood’s small-town feel. The problem with this ideal: Development’s going to happen whether they like it or not. With that in mind, it makes greater sense working to ensure the buildings that are built are attractive and a welcome addition to the neighborhood.
How does this relate to a Dish Network merger with DirecTV?
The TV landscape is drastically changing. The two companies can fight to the death for satellite TV bragging rights, or they can come together to provide consumers with a first-rate bundle of services.
Nobody wins blocking a merger — except the lawyers.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.