Stocks/Earning

Ergen: Dish Would Take Sprint Deal Over DirecTV Merger

Dish Chief Says Sprint Pairing Would Be Transforming 5/09/2013 12:57 PM Eastern

Dish Network chairman and CEO Charlie Ergen told analysts Thursday that given the choice between a merger with No. 1 satellite television service provider DirecTV and the current object of his affection, Sprint-Nextel, he would select the wireless carrier.

Dish has tried to merge with both. Back in 2001 Ergen attempted a $32 billion merger with then-DirecTV parent Hughes Electronics that was rejected by the Federal Communications Commission.   It currently has a $25.5 billion deal on the table for Sprint, which in October agreed to a $20.1 billion acquisition by Japanese wireless giant SoftBank.  Sprint’s board of directors is currently evaluating the Dish offer.

“Our preference is Sprint,” Ergen said on a conference call with analysts to discuss first quarter results. “That’s our focus and that just makes the most sense. Both companies would be transformed in the process. It would become a unique company; it’s something that nobody else can do both inside and outside the home. ”

Ergen added that while there are obvious synergies with DirecTV – a combination, for example, would create a distribution entity with 34 million customers, well ahead of the 20 million customers of the largest cable operator, Comcast – it would only create a larger version of the same company.

“You still would have to ultimately figure out how to transform that company over the long term, in my opinion, because the video business has matured,” Ergen said.

For the quarter, Dish reported flat revenue growth and a 12% decline in cash flow. The second largest satellite TV service provider in the country added 36,000 net new customers in the period, as well as 66,000 broadband customers, up from just 6,000 in the prior year.

 

  

March