Dish taking assets that EchoStar retained after the 2017 transaction
Dish Network (DISH) is purchasing certain operations and assets from EchoStar (SATS) for about $800 million in stock. According to Dish, it bought certain assets from EchoStar in 2017 that it needed to strengthen its flagship satellite television service and Internet-based television brand Sling TV. But that transaction completed two years ago left some key operations and assets with EchoStar. Therefore, the latest deal accords Dish the opportunity to take the EchoStar operations and assets that it needs but didn’t purchase as part of the 2017 transaction.
Dish sees latest deal boosting its earnings
Dish expects that taking those operations and assets that remained with EchoStar after 2017 will help increase its operational efficiency and improve its earnings. Dish made a profit of $340 million in the first quarter compared to a profit of $368 million in the year-ago quarter. The decline in profit follows a drop in Dish’s revenue to $3.2 billion from $3.5 billion a year ago. Comcast (CMCSA), CBS Corporation (CBS), and Charter Communications posted first-quarter profits of $3.6 billion, $1.6 billion, and $253 million, respectively. Altice USA (ATUS) suffered a loss of $25 million in the first quarter, but the loss narrowed sharply from $129 million a year ago.
Dish and EchoStar were once a single company before they separated into two public companies in 2018. EchoStar has been operating the satellite fleet that underpins Dish’s satellite television business.