1 00:00:02,440 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,320 --> 00:00:10,720 Speaker 2: Echo Star announced yesterday that it's selling its video distribution 3 00:00:10,800 --> 00:00:14,160 Speaker 2: business to direct TV, a merger that the satellite providers 4 00:00:14,240 --> 00:00:17,360 Speaker 2: have flirted with for almost two decades. We caught up 5 00:00:17,360 --> 00:00:21,560 Speaker 2: with EchoStar CEO Hamid Akaban. Here's what you have to say. 6 00:00:21,520 --> 00:00:23,799 Speaker 3: The founders was that this business ends up in great 7 00:00:23,800 --> 00:00:28,960 Speaker 3: hands and continue to develop according to their lifelong work 8 00:00:29,160 --> 00:00:31,000 Speaker 3: vision to you know, make it, you know, one of 9 00:00:31,000 --> 00:00:33,000 Speaker 3: the greatest companies they can make, and you know, the 10 00:00:33,040 --> 00:00:35,640 Speaker 3: combination of the two companies now will be that company. 11 00:00:36,440 --> 00:00:38,600 Speaker 3: The company that you know is unique in his position 12 00:00:38,640 --> 00:00:42,199 Speaker 3: in the marketplace. So it's bittersuite, you know, in a 13 00:00:42,200 --> 00:00:44,960 Speaker 3: way they see it in you know, great hands. They're 14 00:00:44,960 --> 00:00:48,400 Speaker 3: coming together and being that challenger that Charlie has created 15 00:00:48,440 --> 00:00:51,480 Speaker 3: over time. But it's also letting it go. It's also 16 00:00:51,560 --> 00:00:54,600 Speaker 3: very difficult. So the answer is bittersweet, not really obvious. 17 00:00:54,880 --> 00:00:57,960 Speaker 2: Satellite TV is ultimately in a state of decline. Will 18 00:00:58,000 --> 00:01:00,640 Speaker 2: this be a period of managed to client for the company. 19 00:01:01,080 --> 00:01:03,400 Speaker 3: It's certainly as part of the thesis that you know 20 00:01:03,480 --> 00:01:05,959 Speaker 3: right now, this is not you know at the time 21 00:01:06,040 --> 00:01:07,640 Speaker 3: that it used to be ten or fifteen years ago 22 00:01:07,680 --> 00:01:10,440 Speaker 3: when the you know, position of these two companies that 23 00:01:10,480 --> 00:01:13,600 Speaker 3: are coming together was unique and was very strong. The 24 00:01:13,640 --> 00:01:16,560 Speaker 3: two companies have lost sixty percent of their subscribers over 25 00:01:16,560 --> 00:01:19,560 Speaker 3: the past since since twenty sixteen, they've lost that Everyone 26 00:01:19,640 --> 00:01:22,040 Speaker 3: has access to broadband today, whether it be terrestrial or 27 00:01:22,120 --> 00:01:26,840 Speaker 3: through satellite startlink. You know, the direct to a consumer 28 00:01:27,319 --> 00:01:33,600 Speaker 3: digital providers programmers going around these two companies are ten 29 00:01:33,640 --> 00:01:35,880 Speaker 3: to twenty times largely in terms of customer base. So 30 00:01:36,319 --> 00:01:38,400 Speaker 3: it is time for these companies to come together to 31 00:01:38,520 --> 00:01:42,520 Speaker 3: increase their sustainability and ability to negotiate better deals that 32 00:01:42,560 --> 00:01:43,880 Speaker 3: it can pass on to the consumers. 33 00:01:44,319 --> 00:01:47,600 Speaker 2: That was Ekosta CEO Hamid Akavan. Now let's continue this 34 00:01:47,680 --> 00:01:51,920 Speaker 2: PATV merger. We're joined by Well who Echo Star sold 35 00:01:52,000 --> 00:01:56,440 Speaker 2: Dish to DirecTV. The CEO now joins us, Bill Morrow. Bill, 36 00:01:56,560 --> 00:01:59,720 Speaker 2: Welcome to the show. And I ask you this now 37 00:02:00,520 --> 00:02:03,920 Speaker 2: going forward to combine nineteen million subscribers you now have, 38 00:02:04,440 --> 00:02:06,680 Speaker 2: what do you offer them? Is it managed to climb? 39 00:02:06,920 --> 00:02:09,919 Speaker 1: Well, thanks Caroline, and actually we're going to offer them 40 00:02:09,960 --> 00:02:13,600 Speaker 1: something that the new kind of competition cannot. You think 41 00:02:13,639 --> 00:02:19,280 Speaker 1: about the volume of directed consumer subscription type services. These 42 00:02:19,280 --> 00:02:23,240 Speaker 1: are the Netflix, Amazon, Primes, that HBO Max's that are 43 00:02:23,240 --> 00:02:25,840 Speaker 1: out there. They have a very narrow scope of the 44 00:02:25,919 --> 00:02:28,440 Speaker 1: content that they offer. The way in which they can 45 00:02:28,440 --> 00:02:32,440 Speaker 1: only navigate through their platforms, consumers are left with having 46 00:02:32,480 --> 00:02:36,560 Speaker 1: to pick and choose multiple subscription services and manage this 47 00:02:36,680 --> 00:02:40,160 Speaker 1: on their own. They're having the difficulty now to navigate 48 00:02:40,480 --> 00:02:44,239 Speaker 1: across these different platforms. With a new company with DirecTV 49 00:02:44,360 --> 00:02:47,600 Speaker 1: and Dish will do is number one. It will actually 50 00:02:47,639 --> 00:02:51,040 Speaker 1: bundle all of those different services together. We'll still have 51 00:02:51,120 --> 00:02:53,919 Speaker 1: a form of linear or time of day type programming, 52 00:02:54,320 --> 00:02:56,720 Speaker 1: but we're going to let the consumer pick and choose 53 00:02:57,040 --> 00:02:59,000 Speaker 1: two or three or four if that's what they want. 54 00:02:59,000 --> 00:03:03,120 Speaker 1: Of these other directed consumer programs. We'll wrap a user 55 00:03:03,160 --> 00:03:06,480 Speaker 1: interface around that. We'll make navigation easy, we'll make search 56 00:03:06,520 --> 00:03:11,560 Speaker 1: and recommendation easy. But equally as important to Caroline is 57 00:03:11,560 --> 00:03:14,240 Speaker 1: that the combined entity with the just under twenty million 58 00:03:14,360 --> 00:03:18,320 Speaker 1: subscribers will give us them a very needed influence on 59 00:03:18,440 --> 00:03:21,520 Speaker 1: the industry to work with the programmers. To say, the 60 00:03:21,639 --> 00:03:24,399 Speaker 1: days of the past. If two hundred and fifty channels 61 00:03:24,639 --> 00:03:27,440 Speaker 1: are gone, consumers don't want to pay for content that 62 00:03:27,520 --> 00:03:30,680 Speaker 1: they are never going to watch, and the programmers are 63 00:03:30,720 --> 00:03:34,120 Speaker 1: still kind of tied to those old carriage agreements. This 64 00:03:34,240 --> 00:03:36,400 Speaker 1: influence is going to change that. It is in the 65 00:03:36,440 --> 00:03:39,200 Speaker 1: interest of the consumers. We think it's in the industry, 66 00:03:39,280 --> 00:03:41,520 Speaker 1: the programmers in the long run, and of course to 67 00:03:41,560 --> 00:03:42,880 Speaker 1: our company as well. 68 00:03:43,000 --> 00:03:46,920 Speaker 2: Bill, I can see how you offer from a price perspective, 69 00:03:47,280 --> 00:03:49,760 Speaker 2: and I can also see how ultimately this is about 70 00:03:50,400 --> 00:03:53,440 Speaker 2: slimming down costs. But what about growth. Do you think 71 00:03:53,480 --> 00:03:56,280 Speaker 2: you will ever increase that number subscribers or is it 72 00:03:56,320 --> 00:03:57,680 Speaker 2: about just serving the ones you have? 73 00:03:58,960 --> 00:04:01,440 Speaker 1: Well? Well, Caroline, really study the market and what are 74 00:04:01,480 --> 00:04:04,320 Speaker 1: the pain points in the current environment that consumers feel 75 00:04:05,000 --> 00:04:08,080 Speaker 1: and again having to manage multiple subscriptions, not knowing where 76 00:04:08,080 --> 00:04:11,280 Speaker 1: your content is even the biggest search engines that can't 77 00:04:11,360 --> 00:04:14,280 Speaker 1: keep up when you're looking for a particular season or 78 00:04:14,320 --> 00:04:17,080 Speaker 1: episode of your favorite series, or a movie that you 79 00:04:17,160 --> 00:04:20,320 Speaker 1: want to watch. We know that the consumers need more 80 00:04:20,360 --> 00:04:24,080 Speaker 1: than what's available today. By combining these two companies having 81 00:04:24,080 --> 00:04:26,560 Speaker 1: the influence to be able to change those carriage agreements, 82 00:04:26,880 --> 00:04:30,240 Speaker 1: We're going to give them thinner, linear bundles of genres 83 00:04:30,320 --> 00:04:32,720 Speaker 1: that they can pick. We'll let them add in and 84 00:04:32,760 --> 00:04:36,560 Speaker 1: insert in the s FOD or those directed consumer Netflix 85 00:04:36,680 --> 00:04:40,440 Speaker 1: or Amazon Primetype services and again with a very different 86 00:04:40,520 --> 00:04:43,719 Speaker 1: kind of experience that will allow us to get back 87 00:04:43,760 --> 00:04:46,920 Speaker 1: into a growth situation. Now we need the two companies 88 00:04:46,960 --> 00:04:49,719 Speaker 1: to come together because we are falling fast. You've heard 89 00:04:49,720 --> 00:04:53,040 Speaker 1: this from a number of different industry experts. So this 90 00:04:53,160 --> 00:04:56,599 Speaker 1: buys us some time, gives us the influence to shape 91 00:04:56,640 --> 00:04:59,520 Speaker 1: the industry. That's all about the consumer, and it's going 92 00:04:59,560 --> 00:05:01,479 Speaker 1: to give some than to them that they haven't had. 93 00:05:01,680 --> 00:05:03,880 Speaker 2: But do we need more streaming? I know that you're 94 00:05:03,880 --> 00:05:07,599 Speaker 2: thinking about DirecTV stream and Dish TV, and ultimately it 95 00:05:07,640 --> 00:05:10,080 Speaker 2: sounds like we're going back to the past by rebundling 96 00:05:10,080 --> 00:05:12,679 Speaker 2: the things we've already snipped in terms of the cord. 97 00:05:13,600 --> 00:05:15,880 Speaker 1: Nob of it is that bundle past is not going 98 00:05:15,920 --> 00:05:17,960 Speaker 1: to service going into the future, and that's why we 99 00:05:18,080 --> 00:05:21,440 Speaker 1: believe with a new kind of carriage agreement, it's going 100 00:05:21,480 --> 00:05:23,479 Speaker 1: to allow you, the rest of the consumers, the rest 101 00:05:23,520 --> 00:05:26,400 Speaker 1: of your viewers, to pick and choose the genres of 102 00:05:26,480 --> 00:05:29,039 Speaker 1: their choice and not pay for all the rest of it. 103 00:05:29,400 --> 00:05:31,320 Speaker 1: So it's not as big of a bundle as what 104 00:05:31,360 --> 00:05:34,320 Speaker 1: we've seen in the past, and that's what we've been advocating. 105 00:05:34,400 --> 00:05:36,719 Speaker 1: That was the deal that we struck with Disney we 106 00:05:36,839 --> 00:05:39,480 Speaker 1: fought so hard for to be able to get let 107 00:05:39,560 --> 00:05:42,320 Speaker 1: the consumers pick what they want to watch and not 108 00:05:42,480 --> 00:05:44,520 Speaker 1: force them to pay for stuff that they will never 109 00:05:44,600 --> 00:05:46,880 Speaker 1: tune into, and that is our future. 110 00:05:47,240 --> 00:05:50,240 Speaker 2: You have other stakeholders, largely private equity now when it 111 00:05:50,240 --> 00:05:54,360 Speaker 2: comes to TPG, but also the creditors, and a lot 112 00:05:54,400 --> 00:05:57,800 Speaker 2: of this is based upon whether or not the bondholders 113 00:05:58,160 --> 00:06:00,400 Speaker 2: of Dish in particular sign up to this thing that 114 00:06:00,440 --> 00:06:02,320 Speaker 2: will go through. How painful is it to take those 115 00:06:02,360 --> 00:06:03,599 Speaker 2: sorts of haircuts. 116 00:06:04,320 --> 00:06:07,360 Speaker 1: Well, we think the current bondholders of the DBS business 117 00:06:07,480 --> 00:06:10,520 Speaker 1: under EchoStar with Dish are going to have a better 118 00:06:10,560 --> 00:06:13,960 Speaker 1: deal by converting and exchanging into the debt that we're offering. 119 00:06:14,800 --> 00:06:17,479 Speaker 1: We think it'll be better leverage ratios than what they 120 00:06:17,560 --> 00:06:20,679 Speaker 1: see today. There's better confidence in terms of this business 121 00:06:20,720 --> 00:06:23,800 Speaker 1: model about looking forward into the future without the risk 122 00:06:23,839 --> 00:06:27,479 Speaker 1: that they might perceive today with that DBS business. We 123 00:06:27,600 --> 00:06:32,640 Speaker 1: also have advocated and explained that while our initial leverage 124 00:06:32,720 --> 00:06:35,560 Speaker 1: ratio will be in the two and a half times, 125 00:06:35,960 --> 00:06:39,440 Speaker 1: that still is better than any other PayTV provider that 126 00:06:39,760 --> 00:06:43,040 Speaker 1: is out in the marketplace today, and within a twelve 127 00:06:43,120 --> 00:06:45,080 Speaker 1: to twenty four month window, we're going to be very 128 00:06:45,080 --> 00:06:48,479 Speaker 1: focused on bringing that leverage ratio down to below two. 129 00:06:49,000 --> 00:06:51,880 Speaker 1: So that's the reason that we believe they're interested in 130 00:06:51,920 --> 00:06:55,479 Speaker 1: making this exchange, lowering that debt, making sure that this 131 00:06:55,640 --> 00:06:58,120 Speaker 1: M and A deal can happen. And then we of 132 00:06:58,160 --> 00:07:01,679 Speaker 1: course proceed to the FCC, the DOJ for the needed 133 00:07:01,720 --> 00:07:02,960 Speaker 1: regulatory approvals. 134 00:07:03,640 --> 00:07:05,440 Speaker 2: We'd like to keep in touch as you go through 135 00:07:05,480 --> 00:07:08,960 Speaker 2: those approvals Direct TV CEO Bill Morrow. We really appreciate 136 00:07:09,000 --> 00:07:09,400 Speaker 2: your time.