The news: The proposed merger between Dish Network and DirecTV has fallen through after a group of Dish bondholders rejected the deal, which would have reduced their claims by about $1.5 billion.

The merger’s collapse is the second failed deal between the pair and puts an end to their hopes of consolidating to stave off linear TV’s decline.

The changing landscape: Previous attempts at a DirecTV-Dish Network merger were shut down by regulators to prevent the formation of a too-powerful TV entity. This time, the merger was something of a last-ditch effort to regain some footing in the video landscape.

• Recent carriage-fee clashes between network-and-streaming providers like Disney and pay TV services show how the lines of power have been redrawn. In September, Disney blocked access to its channels, including ESPN, on DirecTV after it being unsatisfied with carriage-fee negotiations, cutting off access to the NFL season kickoff and second presidential debate.
• Like Charter Spectrum before it, DirecTV eventually struck a new agreement with Disney that gave its customers access to Disney+, a deal that is likely to cause pay TV customers to shift to the streaming service over time due to cheaper pricing.

What’s next? The failure to merge puts Dish Network in a precarious position. The company has a large debt load and a $2 billion payment due this month, which the DirecTV deal would have covered. Without their combined power, the two legacy pay TV companies will continue to see their market shares shrink as digital players throw their weight around.

• An acquisition or merger with other entities might still be possible. Streaming providers like NBCUniversal are planning to spin off linear TV assets into separate companies and have expressed interest in acquisitions, which could target pay TV providers.
• Linear TV’s market share may be doomed to decline, but it’s not game over yet. US traditional TV ad spending will total $59 billion this year, falling to $45.32 billion by 2028, per our forecast.