By Phillip Swann
The TV Answer Man – @tvanswerman
AT&T is reviewing options for its 70 percent stake in DIRECTV, including the possibility of selling it, according to Bloomberg News. The communications giant purchased DIRECTV in 2015 but spun off the company in 2021, selling a 30 percent stake to private equity firm, TPG. Bloomberg writes that the TPG deal allows AT&T to reduce or abandon its 70 percent holding as early as August 2024. Among the options, the news service says, are a dividend recapitalization, adding a new investor, or selling the stake entirely and leaving the business.
Bloomberg says the AT&T review is in early stages and that any deal or decision isn’t imminent. “The current ownership structure may still continue as is,” the article states, adding that AT&T and TPG declined to comment for the article. DIRECTV said it wasn’t aware of any exploration by AT&T to divest of its 70 percent stake.
However, DIRECTV, which has lost 13 million subscribers since AT&T purchased it in 2015, continues to lose customers due to cord cutting despite a sizable investment in the streaming service, DIRECTV Stream. Bloomberg notes that AT&T’s revenue from DIRECTV fell from $2.7 billion to $1.9 billion in the first half of this year because of the subscriber decline.
If AT&T were to sell its DIRECTV stake, the question then would be who would want to buy it? Dish, the company’s longtime satellite rival, would be a likely candidate but merger talks between the two have been unproductive over the years. There’s also a question of whether Dish could get the money to buy a majority stake in DIRECTV. Dish has struggled to find funding for its 5G wireless initiative and faces its own decline in video subscribers.
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— Phillip Swann