EchoStar's Dish sale marks the disappointing end to Ergen's strategy

Dish's “Seinfeld” strategy appears to have ended similarly to the actual series – with the finale being a widely accepted disappointment.

In 2011, Dish co-founder Charlie Ergen mentioned “Seinfeld” for the primary time on an earnings call while responding to an analyst’s query about his company’s diverse assets. Ergen noted that a half-hour episode of the Nineties sitcom typically began with multiple storylines with no clear direction: “But in the last few minutes everything seemed to come together,” he said. “And so I think in terms of the strategic direction that we're going in, you just have to wait and see where it all fits together.”

On Monday, the conclusion was announced assuming regulatory approval.

EchoStarDish's parent company, sold the pay-TV provider to DirecTV for a nominal price of $1 and associated debt of $9.75 billion. Shares of EchoStar fell greater than 11% on Monday.

In recent years, Dish tried but failed to change to a national wireless carrier, while thousands and thousands of pay-TV subscribers canceled streaming services and operators that supply high-speed broadband, resembling Comcast And Charter.

Dish and DirecTV have lost a combined 63% of their video subscribers since 2016.

“Times have changed,” EchoStar CEO Hamid Akhavan said in a CNBC interview on Monday. “The content distribution industry is in decline and losing customers at a rapid pace.”

The company's enterprise value has again fallen sharply.

At Dish and DirecTV talked in regards to the merger In 2014, DirecTV's market cap was roughly $40 billion and Dish's market valuation was greater than $28 billion.

DirecTV sold out a yr later AT&T for $49 billion in equity value. Dish remained independent and lost just about all of its value as its business shrank and satellite television became increasingly anachronistic.

EchoStar and Dish Merged again at first of the yr after splitting in 2008. EchoStar was motivated to shed Dish and its debt with a $2 billion debt payment due in November, CNBC reported last week.

When Ergen talked about Dish and its future development, he would sometimes reach out and extend his fingers, using them as metaphors for various paths forward. For years, he tried to mix Dish's pay-TV business with a wireless service by buying up spectrum at auction and applicant regulatory authorities to enable its use.

In 2019, Dish finally acquired Boost Mobile as a divestment from T-Mobile for $1.4 billion. Still, with out a partner, it was difficult for Dish to search out the capital to each operate its pay-TV business and construct a nationwide network to compete with AT&T, Verizon And T Mobile – especially as satellite TV revenues decline yearly and thousands and thousands of subscribers are lost.

“We couldn’t feed [the wireless] “Business is going really well,” Akhavan said Monday. “The company’s multi-directional focus was also a distraction for management.”

The actual series finale of “Seinfeld” was panned far in comparison with one of the best episodes of the series. It's hard to not view this journey for Dish as the same disappointment.

WATCH: EchoStar CEO's Exclusive CNBC Interview on Dish and DirecTV Collaboration