Q. I have been a DIRECTV subscriber for 15 years and I wake up every morning hoping that AT&T has just sold it. I’m not kidding. I really don’t like AT&T and I want someone else to own DIRECTV so it can be a quality company again. What is the latest on the sale? Is it likely to happen soon or not? — Peter, Evanston, Illinois.
Peter, AT&T has never acknowledged publicly that it’s trying to sell DIRECTV, but there have been reports from Fox News, the New York Post and The Wall Street Journal that the company is taking bids from prospective buyers. The move would make sense considering that DIRECTV has lost six million subscribers since AT&T purchased it in 2015, and that AT&T wants to focus now on its streaming businesses, including HBO Max. The company also wants to eliminate debt, including some incurred from the DIRECTV purchase.
Charles Gasparino, a Fox Business reporter, said last week that AT&T may sell a minority stake in DIRECTV to both Dish and Apollo Global Management, an equity firm. Under this scenario, Dish presumably would run DIRECTV with financial assistance from Apollo.
However, Gasparino also said Apollo is not interested in being part of a deal with Dish so it’s unclear how this would work. Perhaps AT&T would include Dish in a partnership with a different equity firm. Churchill Capital, which has former Time Warner chief Richard Parsons on its management team, has been mentioned as an interested suitor by both the New York Post and The Wall Street Journal.
The New York Post reported a week ago that AT&T was disappointed by the initial bids for DIRECTV, and may decide not to sell if they don’t improve. The offers are around $15 billion, the newspaper writes, which is far below the $49 billion that AT&T paid for DIRECTV five years ago. However, we don’t know if the $15 billion is for a minority stake, or the entire company.
Gasparino’s report, which came the day after the Post article, would seem to contradict the Post’s suggestion that the sale is in danger of being halted.
The Wall Street Journal’s last report on the possible sale came on December 9 when the newspaper wrote that AT&T had received bids of more than $15 billion and that both Apollo and Churchill were interested. WSJ added that a deal could happen in early 2021.
“That would allow AT&T to deconsolidate DirecTV’s worsening financial results—a major aim of the transaction—while relinquishing control even as it maintains a majority stake in the business,” the newspaper wrote.
My educated guess is that AT&T is close to making a deal. The big question is whether it will include Dish or not. There have been frequent reports that AT&T is concerned that federal regulators would nix any DIRECTV transaction that included Dish because it would create a satellite monopoly.
The TV Answer Man will continue to monitor this situation and report back here if and when anything new occurs.
Until then, happy viewing, and stay safe!
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— Phillip Swann