Another Echostar/DIRECTV Merger?

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jpn

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Aug 2, 2005
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This was posted in the editorial section of today's SkyReport. Intriguing, makes me wonder whether D* and E* want to thrive, survive, or just annihilate each other.
A merger between Echostar and DIRECTV is not the only option available to both companies. They could create a joint venture company "InfraSat" that owns the ground stations, satellites and provides engineering services such as receiver design.

With such a business structure, both Echostar and DIRECTV become marketing and branding companies, negotiating their own deals with content providers and creating their own programming packages. The cost savings by removing duplicated ground and space facilities would be huge. Capacity issues would also be addressed by only uplinking one copy of each national and local channel.

The precedent for such an organization exists in several industries already, including the auto industry where engines are shared and in some cases, entire vehicles are sold under two different brand names.

 
Yikes, I hate to say it, but this seems to make a whole bunch of sense to me.
Probably too much, so I doubt it could ever happen.
 
I thought that the idea of sharing infrastructure was brought up a couple of months ago and both E* and D* said they were inerested in persuing it. It would sure be one way to come up with a ton of bandwidth by cutting out all the duplication.
 
Would Charlie be able to negotiate an agreement between D* and E*. Sounds like a great idea, but he has this little problem making deals. Maybe we could get In Demand to do the negotiating for E*.
 
Would Charlie be able to negotiate an agreement between D* and E*. Sounds like a great idea, but he has this little problem making deals. Maybe we could get In Demand to do the negotiating for E*.

Ironically this deal allows him to exploit his Dominant Cheapass Genes. He can still be a prick with the networks, there's nothing to stop him from pissing-off the CourtTV crowd; nothing to stop him from lying about MLB and its demands -- let's face it, MLB TV might cost Dish $2.50/sub on a basic tier -- not a "huge" increase Cheapass whines about. He can continue his Cheapass ways, reduce infrastructure costs, and W-I-D-E-N his margins without any reduction in subscription prices.

But yeah, (seriously) I see how that wouldn't make sense in his fantasy world.
 
I can really see this happening. This would help improve bandwidth and costs and profits for Dish and Direct and their customers. They would have to figure out how to do it though while being two seperate companies if no merger would be allowed.
 
There should be nothing regulatory or market-based that would block such an arrangement. The most glaring precedent is the de-regulated electric industry. The grid is a shared infrastructure, regionally-owned and managed, existing for the purpose of delivering electricity.

DBS is an exact parallel.

My speculation is that these are the biggest potential stumbling points:
  • Finding potential backers to own the shared-infrastructure
  • Neither would control the design of receiving equipment, while both would want significant input.
 
As was discussed before, this would require all new receivers for one or both companies. Definitely uncheap. And a possible showstopper.
 
As was discussed before, this would require all new receivers for one or both companies. Definitely uncheap. And a possible showstopper.
Well, Charlie was willing to do this when he tried to buy D* before. Maybe both companies look at how much their spending on satellites and having two different infrastructures and think the costs might be worth it in the long run.
 
Well, Charlie was willing to do this when he tried to buy D* before. Maybe both companies look at how much their spending on satellites and having two different infrastructures and think the costs might be worth it in the long run.

True.

And yes, different encryption. I think Echostar encryption used to be better, but that's turned around now.
 
The idea reminds me of what happened in Denver between the Denver Post and the Rocky Mountain News. The two competing papers basically merged from the standpoint of administration/advertising/etc.... retaining their own papers, with the Post not printing on Saturday and the News not on Sunday - but with joint editorial pages during the weekend (usually with columns criticizing each other).

The reason - to cut costs, and enable each to survive.

Could it be done with DBS? I don't see why not. Both could benefit. Would it happen? I doubt it. But it is interesting.
 
The idea reminds me of what happened in Denver between the Denver Post and the Rocky Mountain News. The two competing papers basically merged from the standpoint of administration/advertising/etc.... retaining their own papers, with the Post not printing on Saturday and the News not on Sunday - but with joint editorial pages during the weekend (usually with columns criticizing each other).

The reason - to cut costs, and enable each to survive.

Could it be done with DBS? I don't see why not. Both could benefit. Would it happen? I doubt it. But it is interesting.

I think the Detroit News and the Detroit Free Press work the same way with a JOA.

Jimbo
 
As was discussed before, this would require all new receivers for one or both companies. Definitely uncheap. And a possible showstopper.

They would probably continue to use two different encryptions for the time being and eventually merge to whichever is suppose to be better, or move to yet another type over time... I doubt that the change if it came down to it would happen for probably a yearafter the agreement was finished.

Whats the chance that Charlue would sell to anyone and then the merger takes place ? That may easy the complications that Charlie would seem to add.

Jimbo
 
They could both get together when it comes to programming deals by saying that if the deal does not go through with one company it goes through for neither (both get it for the same price) therefore both getting a better deal on the programming, or is this not allowed?
 
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