Q. I read this story saying an equity firm named Churchill Capital might buy DIRECTV from AT&T. Do you know anything about it? — Jean, Albany, New York.
Jean, you’re right. Bloomberg News reported yesterday that Churchill Capital, an investment firm headed by former Citigroup top exec Michael Klein, is one of the companies interested in buying DIRECTV. Several news reports have also mentioned Apollo Global Management, another equity firm, as a possible buyer. CNBC reported this week that AT&T hopes to secure a deal by year’s end although it’s unclear if the buyer would gain a minority or majority stake.
Apollo Global’s interest is not surprising. The company has already demonstrated interest in investing in TV-based operations, purchasing a few dozen local TV stations last year from Cox Media. However, yesterday’s mention of Churchill left some industry observers puzzled.
However, it shouldn’t have. Churchill is an ideal candidate to buy a significant stake in DIRECTV, and run it until a merger with Dish, or another TV-based operation, can be secured.
The company’s About Us page states clearly why Churchill makes sense.
“Our strategy is to identify and complete our initial business combination with a company in an industry that complements the experience and expertise of our management team, Board of Directors and Operating Partners who are comprised of a group of individuals from leading Fortune 500 Companies,” Churchill states.
And who’s on that management/operations team?
Yes, the former chairman and CEO of Time Warner, which during his tenure included Time Warner Cable. Parsons has vast experience with the pay TV industry, and is very familiar with the history of DIRECTV. His expertise would be immensely helpful in steering the nation’s largest satellite TV service in the right direction.
And who else is on that Churchill team?
Yes, the former president of Viacom’s Nickelodeon Networks Group. Another executive with vast experience in the pay TV field.
Churchill arguably has better people ready to run DIRECTV than AT&T has now as its actual owner.
But that’s not the only reason why Churchill is a logical choice here.
The company’s mission statement says it’s dedicated in part in assisting the merger of compatible companies.
“The Company was formed for the purpose of effecting a merger, (italics ours), capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. It may pursue an initial business combination target in any business or industry.:
Dish Chairman Charlie Ergen says a Dish-DIRECTV merger is “inevitable” and which company, led by Parsons (no stranger to Ergen), would be better to ‘effect’ that merger than Churchill?
The TV Answer Man will continue to report on the progress of this sale and will report back here when we get more information.
Until then, happy viewing, and stay safe!
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— Phillip Swann