Liberty’s John Malone Urges Ergen to Merge Dish With DirecTV

Liberty Media Chairman John Malone urged fellow billionaire Charlie Ergen to combine Dish Network with DirecTV to get the advantages of bigger bulk in the pay-TV business.

“It would be good if DirecTV could combine with Echo or Dish or whatever Charlie calls it now just because scale economics in the media business drives down costs and makes it possible for larger investment,” Malone said in an interview at the Allen & Co. conference in Sun Valley, Idaho. “You need larger -- I’m not saying monopoly players -- but you need larger players.” Malone is the largest individual -- as opposed to institutional funds -- shareholder in DirecTV with 27.7 million shares, or 5 percent, according to data compiled by Bloomberg. He was DirecTV’s chairman from 2008 to 2010 after acquiring 38.5 percent of the El Segundo, California-based company in a 2007 asset trade for Liberty’s stake in News Corp. A DirecTV-Dish combination would have 34 million U.S. video customers, making it the world’s largest pay-TV company, ahead of Comcast Corp. and Malone’s European cable asset holding company Liberty Global Plc. Merging would give the new company leverage in negotiations with programmers, such as Walt Disney Co. and Time Warner Inc., to limit content price increases. DirecTV said earlier this year programming costs would rise more than 10 percent in 2013.