As the two largest US cable companies look to push through a huge merger, the urge to consolidate seems to be spreading to the satellite TV industry. Bloomberg reports that Charlie Ergen, chairman of Dish, recently approached DirecTV CEO Mike White to discuss a potential merger. Comcast's proposed buyout of Time Warner Cable reportedly pushed Ergen to get in touch with White. But DirecTV's chief is said to be reluctant about any deal, fearing that an attempt to combine the satellite providers would quickly be shot down by regulars. Dish and DirecTV directly compete with one another throughout the United States, unlike Comcast and Time Warner Cable.
Even if the government ultimately allows Comcast and TWC to become one, Bloomberg says White isn't convinced a merger between DirecTV and Dish would share the same success. And he has reason to be cautious: regulators blocked an earlier merger attempt between the two in 2002. But Ergen has publicly shown interest in a potential deal. "There is obviously a business case that makes a lot of sense for consolidation in the satellite industry,” he said during Dish's Q3 earnings call. "Whether it ever comes to fruition is another story. But both Dish and DirecTV realize that it could make a lot of sense."
White has been far more cautious in public remarks on a merger, which seems to match his private stance. "I certainly believe our industry has changed substantially and I believe there are a lot of reasons why consolidation in our industry would be pro-consumer," he said during an investor meeting in December. "But you'd still have to go sell that in Washington."