DirecTV, Dish Expected to Face Merger Questions on Earnings Call

With satellite TV operators DirecTV and Dish Network set to report fourth-quarter financials, respectively, Wall Street is looking for the latest management commentary on consolidation in the pay TV industry, a hot topic since Comcast unveiled its deal to acquire Time Warner Cable.

A merger deal between DirecTV and Dish Network failed more than a decade ago, but the idea still comes up regularly, and Wall Street observers expect the top executives to be asked about the possibility. Wells Fargo analyst Marci Ryvicker predicted that the Comcast-TWC transaction would spur other deals.

"We view an approved Comcast-TWC transaction as an incremental positive for Dish-DirecTV," she wrote. She noted, though, that a key variable would be Dish chairman Charlie Ergen's "time frame and focus, i.e., we still think priority number one is wireless" for him. Macquarie Securities analyst Amy Yong said that the Comcast-TWC deal would allow the satellite TV giants to argue that they should be allowed to merge if they want because they are facing a stronger competitor.