The news this week that AT&T was planning to sell a significant share of DIRECTV to a company named TPG prompted many people to ask, ‘Who is TPG?”
And when the sale was officially announced today, the next question was, ‘How will TPG change DIRECTV?’
The two questions could also be followed by one more:
‘What makes TPG think anyone could change DIRECTV now?’
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After all, the satellite TV service has lost more than six million subscribers since AT&T purchased it in 2015. And while the satcaster’s losses are far greater than any other pay TV service, the industry as a whole is reeling. Millions of cable and satellite subscribers have cut the cord in recent years due in part to the sudden availability of relatively cheap streaming services. (Escalating prices for cable and satellite, triggered by increasing fee demands from programmers, is another cause.)
But TPG, like most equity firms, does not often invest in a company when it’s doing well. It’s all about turning a company around and then reaping the benefits from a sale and/or increased profits.
So let’s take a closer look at TPG to see if we can forecast what the equity firm might do with DIRECTV.
Who Is TPG?
TPG, which is headquartered in San Francisco and Fort Worth, Texas, was founded in 1992 by three businessmen, William Price III, James Coulter and David Bonderman (now a part owner of the Boston Celtics and the Seattle Kraken, the new NHL expansion team). The company’s mission is to invest in struggling (but potentially viable) companies that lack the capital and/or resources to execute their visions. TPG recoups its investment when the company turns things around and, in some cases, is sold to another company. (Think Dish.)
Over the years, the firm has invested in scores of companies in every conceivable category, including film (MGM Studios), TV (Univision), Internet and digital media (Spotify, Vice, Survey Monkey) and technology (Hotwire, McAfee, Seagate). There’s no doubt that TPG’s management team has an understanding of how entertainment and technology intersect in today’s world.
Would TPG Run DIRECTV?
Probably not. The company tends to invest the capital and then place insiders on the company’s board to help shape its future. TPG would probably allow AT&T’s current executive team to continue running DIRECTV, but it would provide guidance on overall direction, and perhaps add a key executive or two. This is why AT&T announced today that AT&T executive Bill Morrow will serve as DIRECTV’s new CEO when the deal closes. But TPG will have two of the five board seats. And don’t be surprised if you see a TPG favorite or two land high-ranking jobs at the new DIRECTV.
Would TPG Change DIRECTV?
TPG prides itself for being a disruptor rather than a status quo company. In an 2019 interview with Bloomberg, Coulter said “as we have been building our teams, we have focused on innovation. And we find that innovators are attracted to innovation…If you look at our portfolio, you would find many more disruptors than traditional incumbents. If you are an incumbent, you are more at risk than any time in my career and probably any time in the last 100 years.”
As a satellite TV provider, DIRECTV has been an industry ‘incumbent’ for years; AT&T has offered little change to its technology and services since it purchased the TV service in 2015. (One of the reasons why DIRECTV has lost roughly six million subscribers since that purchase). So it will be interesting to see how TPG’s influence might change the satcaster. The equity firm’s history would indicate that DIRECTV would definitely do a few things differently with TPG on board.
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Why Would TPG Want DIRECTV?
DIRECTV has struggled since the AT&T purchase, but it still has more than 15 million subscribers and it dominates a relatively small category (satellite TV, which also has Dish and Orby TV, maybe, that is.) With the right moves, the satcaster could conceivably maintain its market share for a few years, setting up a big payday with a Dish merger. TPG might see this as a ‘buy low and sell high’ proposition.
Have a question about new TV technologies? Send it to The TV Answer Man at swann@tvpredictions.com. Please include your first name and hometown in your message.
— Phillip Swann
ONE HAS to LOVE STUPID PPL with MONEY (OTHER STUPID PPLS MONEY LMAO !!!!!)
DIRECTV is TERMINAL…TPG is obviously STAFFED and RUN by SENILE TROLLS that have lost ALL COMMON SENCE…
SATELLITE TV IS TERMINAL…SO, “INVEST 16.5 B-I-L-L-I-O-N in a LOOOOOOSER and then the the COMPLETE IDIOTS at AT&T still have a say-so in running it.??………….
THIS is the PONZI SCHEME LOOSER of…
THE CENTURY !!
IN LESS than two years DIRECTV will BE NO MORE and TPG will go down the tube (deservedly) with AT&T in BAKRUPSY !!
so, do you think I should stay with Direct? or maybe jump to Dish?
DTV has the worst customer service IMHO. Mostly not US based people that you cannot understand their foreign dialects, and they have no follow thru. DTV equipment has not been updated in I believe the last five years. Dish is by far the best value as far as I am concerned.
I’ll tell you now, I’ve had dish and their installers pointed the dish west it should have been wsw! Direct tv has a 85 percent running rate while a cloud would knock out my signal, dish installers are mostly people who can’t handle a normal job, fact. I live in Lake Placid Florida or Highlands County Florida. I live in the woods I cannot get internet which I hope Direct tv does something about, I’ve tried satellite internet doesn’t work as a fact Highlands County is the only place in Florida that doesn’t get good internet unless it comes from a phone jack that I don’t want. Paying for a land-line isn’t for someone who’s on the go. That’s why I pay for cell service. This merge with TPG might work if yes if they don’t pull a insurance scam. Bail on people who has invested 10s of thousands in insurance That’s more of government controlled one more private jet, luxury yat, insurance company’s should be held responsible,if they aren’t investing money in stocks that pay for claims. Direct tv needs TPG I’ve seen this entity fix companies in trouble I’m gambling on a Direct tv fix. Time will tell.
Except in rural areas, I don’t see any advantage of getting a TV signal from a satellite over streaming over the internet. Especially with growing ala cart alternatives, the overpriced basic tier has lost its popularity with the viewing public. Good luck TPG.
FYI, ala carte killed the big dish in the late 90’s, when you pay the same later, for the few you want, as getting all the extra’s, on a clear screen, including live programming…. i’ll stick to satellite thank you
Until high speed internet is available everywhere there will be a need for satellite TV. Estimates are that there are over 25 million households that can not get high speed internet or cable TV. So if Directv can maintain near 15 million customers at an average of $100 a month ( just guessing ) that would be $18 billion in revenue each year. Add in a couple billion more for pay per view and other specials and you are close to $20 billion. If you can’t make a profit on that revenue you are either incompetent or you are AT&T management. Want to keep those customers? Simple. Go back to the days when Directv had GREAT customer service ( US based ) and cutting edge equipment. Remember the days when you got a new receiver every 2-3 years? I still use H24 receivers!! How old is that technology?? And keep lower the price and keep it close to the streaming services. Doesn’t take a masters degree in business to know that people are leaving satellite and cable due to price.
GREAT Response
Phillip, a couple questions for your expertise.
Since the new company is going to be called DIRECTV, do you think we’ll see AT&T TV revert back to being branded as DIRECTV NOW, and U-Verse rebranded as DIRECTV CABLE?
Assuming the goal is to merge DIRECTV with Dish, and to absorb AT&T TV into Sling, where will that leave U-Verse, as I don’t see Dish wanting a traditional cable TV service? Do you think TPG will shop U-Verse around to Verizon FIOS TV or Charter Spectrum or Cox, which would greatly expand any of those service’s coverage areas?
“How Will It Change DIRECTV?” — not answered in respect to: equipment, programming, fees, promotions — not even any speculation.
Too early.
There are Millions of customers who Have and Still want a “NO Sports Package”.
AT&T Discontinued the “SELECT Package” recently to NEW customers.
Existing customers, so far, are Grandfathered.
Hope the New company Re-Instates a NO sports package with ALL the NO sports channels.
There are some NON sports channels still in the HIGHER Tier packages
that need to be moved to the the “SELECT” package.
DirecTV’s “SELECT” Package is close, but it is lacking a few channels.
Destination America Channel, Cooking, Disc Life, DIY, FLIX, FYI,
Great Am Country – (CMT), Lifetime MOVIE Channel, LOGO,
OWN, Science Channel, The Travel Channel,
The Weather Channel.
We Do NOT want to Pay for channels we NEVER Watch.
Offer a Basic Package with just Local Channels, ABC, CBS, NBC, FOX
CNN, MSMBC, and the Weather Channel.
Put ALL Sports in A-La-Carte Packages.
They can add to just the Basic Package.
Remove the HD Charge for Everyone.
NO DVR Charges. Put DVR service in the CLOUD
Get the Providers to LOWER their Prices.
Offer receivers we can buy.
Offer ALL this thru a Satellite Dish or Streaming
I have been with Direct TV for 21 years I got grandfather in I have lots of basic chanels but sense AT&T took over t have taken some of my chanels I don’t like that the only reason I am with them is that I get lots of channels and I left and couldn’t have it at my other place I had time Warner it shucked and dish didn’t give me any good deals all ways package deals less channels for the price to get the ones that I want more money and I didn’t like that so I went back direct TV they tried to get me to buy a new contract when they told me that I would lose my channels I said no