The merger rumors between the News Corp.-owned DirecTV and EchoStar-operated DISH Network began during an interview with News Corp. Chairman Rupert Murdoch on “The Charlie Rose Show.”
Hoping to breath new life into a deal killed by federal regulators in 2002, Murdoch said that the Federal Trade Commission — the government agency responsible for overseeing large corporate mergers and acquisitions — would likely approve the merger this time around.
“There are so many alternatives, ways of getting pictures and information," Murdoch said. "I think it would be much harder for the government to turn it down."
Government regulators nixed the previous, deal citing concerns that the merger would leave consumers at the mercy of satellite monopoly.
While Murdoch would not confirm whether the two companies were in talks regarding a merger, TVPredictions.com staff writer Phillip Swann said that it would be highly unlikely for Murdoch to make such a public statement if a deal wasn’t something he was serious about pursuing.
“Murdoch's comments suggest that the merger is indeed possible,” Swann said. “The 75-year-old media mogul would never have publicly suggested that a deal would be approved by the feds unless he was interested in pursuing one. He seems to be laying the groundwork for a lobbying campaign in Washington in case DirecTV and EchoStar are able to make a deal.”
The merger speculation comes on the heels of a joint effort by both companies to combine bids in an upcoming U.S. government auction of wireless airwaves.
In March, DirecTV’s chief financial officer Mike Palkovic told an industry conference that his company had an interest acquiring EchoStar.
While federal regulators put the kybosh on the 2002 deal, this latest round of merger speculation is far from unfamiliar territory for both companies.
A 1997 merger fell through when EchoStar CEO Charlie Ergen fought with News Corp. executives before the agreement could be completed.
Murdoch cautioned that the deal might be a difficult one to cement if Ergen insists on running the company for a while.
DISH Network carries a host of Playboy and Spice content offerings using a pay-per-view model. DirectTV’s site lists many of the same channel offerings, plus Hustler TV.
