Creditors to US satellite television firm Dish Network plan to block a distressed exchange that’s a key part of its tie-up with rival DirecTV, according to people familiar with the matter.

The deal, which is subject to regulatory approval, would create one of the largest pay-TV distributors in the U.S. The companies were blocked in an attempt to merge in 2002.

Credit ratings agency S&P Global notes the "linear TV industry is rapidly shrinking" and the increased scale provided by a merger may not offset subscriber declines.

DirecTV's agreement to buy the Dish satellite and streaming TV business from EchoStar is facing opposition from Dish creditors who would be forced to take a loss on the value of their debt. Dish creditors "plan to block a distressed exchange that's a key part of its tie-up with rival DirecTV,