DirecTV CEO Sees 'Logic' in a Merger with Dish Network

3:25 PM PST 06/01/2012 by Eriq Gardner
Jonathan Fickies/Bloomberg via Getty Images

Rising cost of carrying programming is cited as a core reason why a marriage between satellite TV giants would make sense.

DirecTV CEO Mike White on Friday said that there was something to be said for another attempt at a merger with Dish Network.

"There is a strategic logic to having one satellite company servicing a country like the United States, and certainly if I look at where content costs are, there is probably more of a case for that," he said.

Speaking at the Sanford C. Bernstein 28th annual Strategic Decisions Conference in New York, White was asked about the possibility of a merger. The companies tried to combine in 2002, but the plan was rejected by the FCC as anti-competitive. Speaking Friday, White conditioned that he doesn't think it is useful to speculate nor had much interest in laying out his strategy, but nevertheless he threw some weight behind the idea.

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"Charlie felt this 10 years ago," he said, referring to Dish chairman Charlie Ergen.

After saying there was "strategic logic" behind a DirecTV-Dish merger, White poured some cold water on the immediate possibility. "I think at least with the current (Obama) administration, (it) is probably a nonstarter," he said.

A Dish-DirecTV merger would certainly prompt scrutiny from regulators, particularly with a Democrat in the White House, but of course, there's an election in November, and a Mitt Romney victory could pave a path toward more merger-friendly FCC commissioners.

For its part, Dish also has recently played footsie with a merger. In an interview with Bloomberg News last year, Dish CEO Joe Clayton said he wouldn't discount the possibility. "It’s probably easier from a regulatory environment today than it was five to 10 years ago, when it was originally proposed," he said. "We’re looking at anything that will help enhance shareholder value."

At the conference Friday, White had kind words for his main competitor in the satellite TV space. "Charlie Ergen has been very successful as a businessman," he said. "They are a tough, aggressive competitor. They are investing in their business."

On the other hand, White says that when he looks at his own company's churn rate, he doesn't think DirecTV is losing any customers to Dish.

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If the companies got together, it could be an attempt to gain leverage over broadcasters in negotiations over the cost of programming. White had tough words about escalating content costs for his business.

"Now I don’t yell and scream in the media, OK, because I don’t think it does you a lot of good," said White. "But it is clear when I started looking at DirecTV, there were some opportunities and some areas we were overpackaged and were paying higher rates than we should."

He continued: "I don’t like it, but when necessary, we’ll do whatever it takes. In the case of Fox. In the case of Sunbeam.  In the case of Tribune. If we have to go dark, we’ll go dark. We’ll do the right thing for the long-term benefit of our consumers.”

White also remarked that he's enthusiastic about his company's opportunities, particularly in Latin America. He opened his remarks with a joke: "Here's the good news -- we're not in Europe."

E-mail: eriq.gardner@thr.com

Twitter: @eriqgardner

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