Why Doesn't Apple Just Buy DISH Networks to Solve Its iTV Content Problems?

I have long believed that Apple's iTV is inevitable (for well over two years now).  But, I also have always said that Apple must follow its tried-and-true playbook to succeed spectacularly -- and, that is to seamlessly merge its beautiful hardware with wonderful content and software to create a revolutionary new television "experience."  Sure, a beautiful iTV alone would sell big.  But, it will only be really really big -- which is the only way Apple plays -- if the iTV gets the premium content it needs.  And, that means television programming ... the kind you get from your good old-fashioned cable company ... or satellite company (hold that last thought for a moment).  You know, all the major networks, ESPN ... especially ESPN!

Lots of articles in the past couple days about Apple's dilemma here, all starting with a new Wall Street Journal article that discusses Apple's continuing difficulties in trying to negotiate the programming rights it needs from them (here's one to read from Ryan Lawler and TechCrunch -- nice contrarian perspective from Ryan (who I call the Woodward & Bernstein of digital media), but since when does Ryan drop "F" bombs?  Oh yes, he is now at TechCrunch).  Remember, the cable guys don't exactly trust Apple.  Nor should they.  Don't forget what Apple did to the music industry.  Disrupted it completely (I wrote about this previously in a guest post on TechCrunch).  Lots of forces at work to see that that same fate doesn't befall the television industry (and its traditional symbiotic eco-system of cable/satellite operators and major media companies).

So, what's an Apple to do if it doesn't get the love it needs from the major MSOs?  Buy the content, that's what!  It's not like Apple doesn't have the money.  Last I checked, Apple had over $110 billion in its bank account.  And, a lot of television programming can be bought for $110 million.

Here's one thought.  Why doesn't Apple just buy DISH Networks?  DISH is ripe.  It is a distant second to DirecTV -- and its market cap reflects that.  Its market cap is $13.91 billion, as opposed to DirecTV's which is $32.27 billion (so it would be an easier pill to swallow).  DISH has all the television programming that Apple would need to completely disrupt the television game (it also offers broadband service, by the way).  In one fell swoop, Apple could swoop in and storm out of the multiple cable negotiation rooms in which it has languished for months and months and months.  It would immediately gain its holy grail of having a national footprint, rather than having to piecemeal chunk one by negotiating deals with essentially every cable operator in the U.S.

Now, to be clear: (1) I have had no opportunity to review DISH Networks' licensing deals -- so I don't know (a) how long its terms are with the individual networks and programmers (like ESPN), and (b) whether a so-called "change of control" provision in any of those content licensing deals could block the seamless transfer of those re-distribution rights to Apple in any such acquisition; and (2) the Justice Department certainly could (in fact, inevitably would) have a field day in reviewing that kind of mega-merger that would directly threaten big cable; the MSO's lobbyists would be in full force, as would most major media companies (remember, those are blending as well -- Comcast/NBC Universal).

But, let's be clear.  The living room is Apple's next great frontier.  It must go there -- in fact, it has nowhere else to go.  And, the living room -- and the television "experience" in general -- is ripe for the kind of disruption that Apple is famous for.

So, would Apple ever spend $13.91 billion to buy DISH Networks (which really would be significantly higher than that in order to give DISH shareholders the premium they would need to approve that kind of deal)?

I know, I know.  Apple is fundamentally a hardware company, not a service provider.  I "get" it.  It makes its money by selling the hardware, and riding on the coattails of others who create the content that enable its products to be the legendary experience that they have come to be.  But, desperate times call for desperate measures.  If Apple finds it too difficult to negotiate for the rights it needs, then it may choose to solve its problem with cash.  After all, even $20 billion represents only about 20% of Apple's cash holdings ... which continue to grow and grow with every passing quarter.  And, with Tim Cook at the helm, there is a new sheriff in town.

I'm just sayin' ....