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DISH Network to Swap Assets with Sister Concern EchoStar

According to a recent report by The Business Journals,DISH Network Corp.DISH , the second largest satellite TV operator in the U.S. (with 13.6 million customers) has entered into an agreement with its sister company, EchoStar Corp. Per the deal, both companies will be engaged in exchanging their assets. Based in the U.S., EchoStar Corporation is a global satellite services provider and developer of hybrid video delivery technologies. It is the owner and operator of the satellite fleet for the closely affiliated Dish Network.

As per the deal, DISH Network will obtain EchoStar assets and operations including the EchoStar Technologies hardware and software technology development group, set-top box development and satellite uplink and fiber-optic backhaul for its transmissions, along with some real estate owned by EchoStar in Colorado, Arizona and Wyoming. This transaction also transfers the 10% stake held by EchoStar in Sling TV and wireless spectrum licenses covering four markets in the 28 GHz band to DISH Network.

On the other hand, EchoStar Corp. will obtain DISH Network's 80% economic interest in Hughes Retail Group, which is the consumer satellite broadband services operation of EchoStar. Hence, this transaction will place EchoStar as a pure-play satellite services business, taking it out of the TV hardware and software development game by transferring these to its biggest customer, Dish Network.

EchoStar will continue to generate revenues from HughesNet satellite broadband sales to Dish Network. The broadband and other services EchoStar sold to Dish Network accounted for $918 million of its 2015 revenue, according to its U.S. Securities & Exchange Commission filing.

Notably, the assets involved in the deal are worth hundreds of millions of dollars, or even more.

The transaction is structured in such a manner so that it remains a tax-free exchange and is expected to close in the first quarter of 2017 (Mar 30), subject to regulatory approvals. However, the monetary value of the deal has not yet been estimated.

DISH Network will continue to market satellite broadband under the brand dishNET to rural customers. It further stated that this deal will help both parties to assimilate all the elements they require to provide better customer experience while delivering the full DISH and Sling TV experience to them.

Latest Developments

In the beginning of Jan 2017, DISH Network's subsidiary, AirTV launched its latest streaming device, AirTV Player. Air TV Player is a 4K Android-based streaming device which supports ultra HD (high definition) and is pre-loaded with Netflix Inc. NFLX , SlingTV and YouTube apps and that work with an over-the-air antenna for broadcast TV. Hence, AirTV marks "a single unified" platform for on-demand streaming, Internet TV, and over-the-air (OTA) local channels.

Further news of new beginnings in the Cable TV industry came from Comcast Corp. CMCSA , a leading cable multi-service operator (MSO) in the U.S. On Jan 1, Comcast inked a new pact with Twenty-First Century Fox, Inc. FOXA after resolving their 13-month old battle over the carriage of the YES Network in the New York City area.

Over the past three months, DISH Network gained 7.2% but failed to beat the Zacks categorized Cable TV industry's growth of 19.4%.

DISH Network currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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Netflix, Inc. (NFLX): Free Stock Analysis Report

DISH Network Corporation (DISH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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