Dish DBS, the parent company of pay television providers Dish Network and Sling TV, is preparing a Chapter 11 bankruptcy filing that could be announced as soon as this week, according to a report published on Monday.
The report, from the Wall Street Journal, said the filing comes as Dish DBS struggles to make debt repayments amid ongoing churn in its traditional and streaming TV businesses. Several law firms have been tapped to advise Dish DBS on the bankruptcy filing.
Dish DBS operates as a subsidiary business of Echostar Corporation. In addition to its pay TV services, Dish DBS includes wireless provider Boost Mobile.
Earlier this month, Dish DBS said it would miss an on-time debt repayment that was due on June 1 because of scrutiny imposed by the Federal Communications Commission (FCC) on its network build-out. Last year, Echostar sold some of its wireless licenses to AT&T and SpaceX, a move the company later said was made under duress. (FCC Chairman Brendan Carr has been a vocal supporter of SpaceX for several years.)
Stock Price
In a regulatory filing last year, Echostar said Dish DBS faces “intense and increasing competition from providers of video, broadband and/or wireless services” that serves as proof of the competitive and economic risks of the business.
“Changing consumer behavior and new technologies in our pay TV business may reduce our subscriber activations, and may cause our subscribers to purchase fewer services from us or to cancel our services altogether, resulting in less revenue to us,” Dish DBS executives warned in the disclosure to shareholders.
In May, Echostar revealed Dish DBS lost 366,000 pay TV customers during the first three months of the year, compared to a decrease of 381,000 pay TV subscribers one year earlier. The company has just over 6.6 million pay TV customers as of last count, putting it ahead of services like Hulu with Live TV and Fubo (on a non-consolidated basis), but behind pay TV products owned by Charter, Comcast, DIRECTV and Google’s YouTube.
In a last-ditch effort to save its pay TV business, Dish Network in 2024 announced an agreement to merge with DIRECTV, a move that would have placed their streaming and traditional TV products in a stronger competitive position. The combination was called off less than two months later after Dish was unable to secure agreements with its creditors to restructure certain debt, which was necessary for the merger to move forward.
