Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Echo Star announced yesterday that it's selling its video distribution
Speaker 2: business to direct TV, a merger that the satellite providers
Speaker 2: have flirted with for almost two decades. We caught up
Speaker 2: with EchoStar CEO Hamid Akaban. Here's what you have to say.
Speaker 3: The founders was that this business ends up in great
Speaker 3: hands and continue to develop according to their lifelong work
Speaker 3: vision to you know, make it, you know, one of
Speaker 3: the greatest companies they can make, and you know, the
Speaker 3: combination of the two companies now will be that company.
Speaker 3: The company that you know is unique in his position
Speaker 3: in the marketplace. So it's bittersuite, you know, in a
Speaker 3: way they see it in you know, great hands. They're
Speaker 3: coming together and being that challenger that Charlie has created
Speaker 3: over time. But it's also letting it go. It's also
Speaker 3: very difficult. So the answer is bittersweet, not really obvious.
Speaker 2: Satellite TV is ultimately in a state of decline. Will
Speaker 2: this be a period of managed to client for the company.
Speaker 3: It's certainly as part of the thesis that you know
Speaker 3: right now, this is not you know at the time
Speaker 3: that it used to be ten or fifteen years ago
Speaker 3: when the you know, position of these two companies that
Speaker 3: are coming together was unique and was very strong. The
Speaker 3: two companies have lost sixty percent of their subscribers over
Speaker 3: the past since since twenty sixteen, they've lost that Everyone
Speaker 3: has access to broadband today, whether it be terrestrial or
Speaker 3: through satellite startlink. You know, the direct to a consumer
Speaker 3: digital providers programmers going around these two companies are ten
Speaker 3: to twenty times largely in terms of customer base. So
Speaker 3: it is time for these companies to come together to
Speaker 3: increase their sustainability and ability to negotiate better deals that
Speaker 3: it can pass on to the consumers.
Speaker 2: That was Ekosta CEO Hamid Akavan. Now let's continue this
Speaker 2: PATV merger. We're joined by Well who Echo Star sold
Speaker 2: Dish to DirecTV. The CEO now joins us, Bill Morrow. Bill,
Speaker 2: Welcome to the show. And I ask you this now
Speaker 2: going forward to combine nineteen million subscribers you now have,
Speaker 2: what do you offer them? Is it managed to climb?
Speaker 1: Well, thanks Caroline, and actually we're going to offer them
Speaker 1: something that the new kind of competition cannot. You think
Speaker 1: about the volume of directed consumer subscription type services. These
Speaker 1: are the Netflix, Amazon, Primes, that HBO Max's that are
Speaker 1: out there. They have a very narrow scope of the
Speaker 1: content that they offer. The way in which they can
Speaker 1: only navigate through their platforms, consumers are left with having
Speaker 1: to pick and choose multiple subscription services and manage this
Speaker 1: on their own. They're having the difficulty now to navigate
Speaker 1: across these different platforms. With a new company with DirecTV
Speaker 1: and Dish will do is number one. It will actually
Speaker 1: bundle all of those different services together. We'll still have
Speaker 1: a form of linear or time of day type programming,
Speaker 1: but we're going to let the consumer pick and choose
Speaker 1: two or three or four if that's what they want.
Speaker 1: Of these other directed consumer programs. We'll wrap a user
Speaker 1: interface around that. We'll make navigation easy, we'll make search
Speaker 1: and recommendation easy. But equally as important to Caroline is
Speaker 1: that the combined entity with the just under twenty million
Speaker 1: subscribers will give us them a very needed influence on
Speaker 1: the industry to work with the programmers. To say, the
Speaker 1: days of the past. If two hundred and fifty channels
Speaker 1: are gone, consumers don't want to pay for content that
Speaker 1: they are never going to watch, and the programmers are
Speaker 1: still kind of tied to those old carriage agreements. This
Speaker 1: influence is going to change that. It is in the
Speaker 1: interest of the consumers. We think it's in the industry,
Speaker 1: the programmers in the long run, and of course to
Speaker 1: our company as well.
Speaker 2: Bill, I can see how you offer from a price perspective,
Speaker 2: and I can also see how ultimately this is about
Speaker 2: slimming down costs. But what about growth. Do you think
Speaker 2: you will ever increase that number subscribers or is it
Speaker 2: about just serving the ones you have?
Speaker 1: Well? Well, Caroline, really study the market and what are
Speaker 1: the pain points in the current environment that consumers feel
Speaker 1: and again having to manage multiple subscriptions, not knowing where
Speaker 1: your content is even the biggest search engines that can't
Speaker 1: keep up when you're looking for a particular season or
Speaker 1: episode of your favorite series, or a movie that you
Speaker 1: want to watch. We know that the consumers need more
Speaker 1: than what's available today. By combining these two companies having
Speaker 1: the influence to be able to change those carriage agreements,
Speaker 1: We're going to give them thinner, linear bundles of genres
Speaker 1: that they can pick. We'll let them add in and
Speaker 1: insert in the s FOD or those directed consumer Netflix
Speaker 1: or Amazon Primetype services and again with a very different
Speaker 1: kind of experience that will allow us to get back
Speaker 1: into a growth situation. Now we need the two companies
Speaker 1: to come together because we are falling fast. You've heard
Speaker 1: this from a number of different industry experts. So this
Speaker 1: buys us some time, gives us the influence to shape
Speaker 1: the industry. That's all about the consumer, and it's going
Speaker 1: to give some than to them that they haven't had.
Speaker 2: But do we need more streaming? I know that you're
Speaker 2: thinking about DirecTV stream and Dish TV, and ultimately it
Speaker 2: sounds like we're going back to the past by rebundling
Speaker 2: the things we've already snipped in terms of the cord.
Speaker 1: Nob of it is that bundle past is not going
Speaker 1: to service going into the future, and that's why we
Speaker 1: believe with a new kind of carriage agreement, it's going
Speaker 1: to allow you, the rest of the consumers, the rest
Speaker 1: of your viewers, to pick and choose the genres of
Speaker 1: their choice and not pay for all the rest of it.
Speaker 1: So it's not as big of a bundle as what
Speaker 1: we've seen in the past, and that's what we've been advocating.
Speaker 1: That was the deal that we struck with Disney we
Speaker 1: fought so hard for to be able to get let
Speaker 1: the consumers pick what they want to watch and not
Speaker 1: force them to pay for stuff that they will never
Speaker 1: tune into, and that is our future.
Speaker 2: You have other stakeholders, largely private equity now when it
Speaker 2: comes to TPG, but also the creditors, and a lot
Speaker 2: of this is based upon whether or not the bondholders
Speaker 2: of Dish in particular sign up to this thing that
Speaker 2: will go through. How painful is it to take those
Speaker 2: sorts of haircuts.
Speaker 1: Well, we think the current bondholders of the DBS business
Speaker 1: under EchoStar with Dish are going to have a better
Speaker 1: deal by converting and exchanging into the debt that we're offering.
Speaker 1: We think it'll be better leverage ratios than what they
Speaker 1: see today. There's better confidence in terms of this business
Speaker 1: model about looking forward into the future without the risk
Speaker 1: that they might perceive today with that DBS business. We
Speaker 1: also have advocated and explained that while our initial leverage
Speaker 1: ratio will be in the two and a half times,
Speaker 1: that still is better than any other PayTV provider that
Speaker 1: is out in the marketplace today, and within a twelve
Speaker 1: to twenty four month window, we're going to be very
Speaker 1: focused on bringing that leverage ratio down to below two.
Speaker 1: So that's the reason that we believe they're interested in
Speaker 1: making this exchange, lowering that debt, making sure that this
Speaker 1: M and A deal can happen. And then we of
Speaker 1: course proceed to the FCC, the DOJ for the needed
Speaker 1: regulatory approvals.
Speaker 2: We'd like to keep in touch as you go through
Speaker 2: those approvals Direct TV CEO Bill Morrow. We really appreciate
Speaker 2: your time.