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After abandoning a bid for Sprint, Dish chairman Charlie Ergen is being watched closely by analysts, who are waiting to see what he’ll do next. His company has attempted to acquire Clearwire Corp., and has reportedly had discussions with T-Mobile U.S., so there’s a sense that a big M&A move is on the horizon.
Speaking to a Bloomberg reporter, Malone threw his weighted opinion into the ring by reviving the idea that the two biggest satellite TV companies should combine operations.
“It would be good, by the way, if DirecTV could combine with Echo or Dish or whatever Charlie calls it now just because scale economics in the media business drives down cost and makes it possible for larger investment,” said Malone.
Malone, who formerly was DirecTV’s chairman from 2008 to 2010 and is the company’s biggest individual shareholder, then added, “To me, in order to improve the services for the consumer, you need larger — not saying monopoly players — but you need larger players.”
DirecTV might be receptive to such a move.
Last year, DirecTV CEO Mike White commented at another conference that “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.”
At the time, White also cooled speculation by alluding to the challenge of having such a merger approved by the Obama administration. It could run into antitrust barriers.
Still, analysts are betting the satellite merger might actually happen. Three weeks ago, Craig Moffett, a cable and satellite researcher, noted how Dish’s buy options were dwindling and commented, “By process of elimination, Dish is going to be dragged kicking and screaming into what was the best option from the beginning: a merger with DirecTV.”
At midday, DirecTV’s stock price was up 2.35 percent to just under $64 a share. However, some of the price movement could be attributed to speculation that the company is in the lead to purchase Hulu.
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