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Dish and Charter Report Losses Renewing Merger Speculation

Dish Network Corp (NYSE: DISH) posted a loss of $11 million yesterday. Cable provider, Charter Communications Inc. (NASDAQ: CHTR) reported a $96 million loss on the same day. Clearly what both companies have been doing has not been working. When things aren’t working, one of Wall Street’s most frequently offered solutions is M&A.

Both companies are considering their M&A options, Bloomberg says.

Dish, number three among the top pay television entities in America tried to merge with number two, DirecTV (NASDAQ: DTV) in 2002. The FCC rejected the plan, saying it would harm consumers.

That was then. This is now. So says Dish CEO, Charles Ergen who said during a conference call Tuesday that the industry was “materially different than the last time we tried to merge.”

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What is “materially different” is the number of options consumers now have. In addition to the two major satellite providers and a number of cable companies, many consumers are now switching to “over the top” (OTT) video streaming via the Internet via companies like Netflix Inc. (NASDAQ: NFLX), Hulu, and more recent upstart, Aereo.

As for Charter, if it was up to Liberty Media Corp. (NYSE: LMCA), which owns 27 percent of Charter, the company would merge with Time Warner Cable Inc. (NYSE: TWC) immediately. Or, alternatively, Cox Communications Inc. which is privately owned.

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Disclosure: At the time of this writing, the author had no position in the company mentioned.

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